Nvidia Inc. (NASDAQ:NVDA) hit an all-time high on May 13, 2026, pushing its market cap to $5.4 trillion. Yet the record obscures a more important question for investors: why has the world's most valuable chip company been underperforming its own sector for months? Ultimately, the answer, and the reason Jensen Huang's seat on Air Force One matters, traces back to one market where Nvidia's revenue has dropped to exactly zero.

The Underperformance Nobody Is Talking About

The gap between Nvidia and its semiconductor peers has become impossible to ignore. In April 2026, NVDA gained 14%. Over that same period, however, the iShares Semiconductor ETF (NASDAQ:SOXX) rallied 40.4%, its best month on record. According to Barchart, the spread between the two was the widest in more than two years.

The story is equally striking across individual names. Advanced Micro Devices Inc. (NASDAQ:AMD) surged roughly 90% over the past month, while Micron Technology Inc. (NASDAQ:MU) climbed approximately 76%. Similarly, Intel Corp. (NASDAQ:INTC) gained more than 30%. Nvidia, by contrast, rose about 19%.

Clearly, for a company that dominates AI chip demand globally, that divergence demands an explanation. Analysts point consistently to China as the overhang responsible for the relative weakness.

A $17 Billion Market That Went to Zero

Before U.S. export restrictions escalated, Nvidia controlled roughly 95% of China's advanced AI chip market. China accounted for at least one-fifth of the company's data center revenue, which Huang valued at nearly $50 billion annually as recently as 2025.

Today, Nvidia's China revenue stands at zero. CFO Colette Kress confirmed on an earnings call that the company no longer includes China in its baseline forecasts. She added: “We do not know whether any imports will be allowed into China.”

The financial damage is quantified in Nvidia's own SEC filings. The company incurred a $4.5 billion charge in fiscal Q1 2026 tied to H20 chip inventory and purchase obligations after the U.S. government required export licenses. A further $8 billion in expected H20 revenue was set to disappear in Q2. In December 2025, the Trump administration approved sales of the more advanced H200 chip to China, but attached a condition requiring the U.S. government to receive 25% of resulting revenue. Those sales have since stalled completely. As of the most recent earnings call, Nvidia had generated zero revenue under the H200 program.

Why the Record Does Not Tell the Whole Story

It is worth pausing on what $5.4 trillion actually means in this context. Nvidia is already the most valuable company in the world, and it got there with zero revenue from China. AMD surged 90% and Micron climbed 76% in recent months, yet neither company is close to Nvidia’s valuation because they started from a much smaller base.

AMD sits at roughly $300 to $400 billion in market cap. Micron is around $130 billion. Even after those outsized gains, they remain a fraction of Nvidia’s size. The percentage underperformance is not a sign that Nvidia is losing. It is a sign that the market has already priced in Nvidia’s dominance everywhere except China. That is precisely what makes China the most important number in the entire Nvidia story right now.

Huang’s Podcast Was His Opening Argument

Weeks before Air Force One, Huang chose an unusual venue to make his public case. On April 15, 2026, he sat down with tech podcaster Dwarkesh Patel for a 103-minute conversation that drew more than 712,000 YouTube views and dominated tech industry discussions for days.

The exchange turned heated when Patel asked whether exporting advanced AI chips to China posed national security risks. He cited Anthropic's Claude Mythos model, which reportedly identified thousands of high-severity zero-day vulnerabilities, as an example of what a Chinese lab might do with greater compute access.

Huang pushed back directly. He argued that Mythos “was trained on fairly mundane capacity” and that China already has equivalent compute domestically. He backed that claim with two technical points: first, that 7nm chips are functionally equivalent to Nvidia's Hopper generation, on which most of today's frontier AI models were trained; and second, that China's abundant and cheap energy lets operators compensate for any chip generation gap by simply running more hardware in parallel.

As the exchange intensified, Huang rejected the premise that Nvidia was surrendering the market. “The premise that, even if we competed in China, that we're going to lose that market anyways, you're not talking to somebody who woke up a loser,” he said.

His deeper argument, however, was about platform dominance rather than revenue. “We want to make sure that all the AI developers in the world are developing on the American tech stack,” Huang said. “It would be extremely foolish to create two ecosystems.” His concern is that every Chinese developer who switches to Huawei's Ascend platform weakens Nvidia's CUDA ecosystem globally, not just in China. ASML Holdings NV (NASDAQ:ASML) CEO Christophe Fouquet publicly backed that logic. “I think he's totally right,” Fouquet told TechCrunch. “You can keep a technological advantage by maintaining a generation gap in what you sell.” He noted that Nvidia operates with roughly an eight-generation gap between what it sells domestically versus what it offers China.

What the Air Force One Seat Actually Signals

Huang was not originally included in Trump's delegation to Beijing, a list that featured Apple (AAPL) CEO Tim Cook, Tesla (TSLA) CEO Elon Musk, and Goldman Sachs Group (GS) CEO David Solomon, among others. After media coverage flagged Huang's absence, Trump called him directly and asked him to join. Huang flew to Alaska to board Air Force One mid-journey.

Trump confirmed the development on Truth Social, adding that his “first request” to Xi Jinping would be to open China to U.S. businesses. That framing matters. It positions chip market access not as a narrow trade dispute but as a headline agenda item for a summit that also covers AI governance and the broader U.S.-China tech relationship.

Former U.S. Commerce Secretary Carlos Gutierrez told CNBC that a full export control deal remains unlikely. Still, he said Huang's presence was meaningful: “It's positive that he's there, and he's part of the President's delegation, and that's important for him and it's important for the President.”

The Bear and Bull Cases in Plain Terms

The skeptical view comes from Hao Hong, chief investment officer at Lotus Asset Management. He told CNBC there would be “very little” in concrete deliverables from the summit and that technological decoupling between the U.S. and China is more likely to increase than reverse.

The structural friction supports that caution. China's State Administration for Market Regulation announced in September 2025 that Nvidia violated its 2020 antitrust review terms. Beijing has directed domestic companies to prioritize local chip alternatives and effectively blacklisted the H20. Even the approved H200 sales face a 25% U.S. import tariff, adding another layer of friction to any deal.

On the other side, the bull case rests on one key fact: Nvidia's current guidance explicitly excludes China. Any reopening, even partial, forces analysts to revise models upward from a zero baseline. With 37 analysts rating NVDA a “Strong Buy” and a consensus 12-month price target of $272.08, roughly 23% above recent prices, the AI demand story remains strong. Combined hyperscaler capital expenditure from Alphabet (GOOGL), Amazon.com (AMZN), Meta Platforms (META), and Microsoft Corp. (MSFT) is expected to approach $725 billion in 2026, providing a solid demand floor regardless of Beijing's next move.

What to Watch Next

Nvidia reports fiscal Q1 2027 earnings on May 20, 2026, days after the Trump-Xi summit concludes. Investors will focus on any management commentary about China, particularly whether there is movement on the stalled H200 program.

As of May 13, 2026, Huang put it plainly at CES in January: “We're not expecting any press releases, or any large declarations. It's just going to be purchase orders.” The diplomacy has been loud. The purchase orders have not arrived yet.

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.