Nvidia Resumes AI Chip Sales in China Following U.S. Approval
Nvidia resumes AI chip sales in China after U.S. approval, boosting stock and growth prospects.
Key Points
- • Nvidia cleared to sell H20 AI chips in China after U.S. government approval.
- • Nvidia's stock rose over 4% following the announcement, boosting shares of TSMC and AMD.
- • Analysts predict a 38% revenue growth due to regained sales from China.
- • Huang's meeting with President Trump highlights U.S. support for Nvidia's operations.
Nvidia has officially resumed the sale of its H20 AI chips in China following approval from the U.S. government, marking a significant recovery in its global operations. This decision comes after Nvidia's CEO, Jensen Huang, engaged in high-level discussions with President Trump and other officials regarding job creation and enhancing domestic AI infrastructure.
The approval, which materialized after previous sales were halted due to national security concerns in April, has resulted in a notable uplift in Nvidia's stock. Following the announcement, shares jumped over 4%, reaching $171.81. Other related companies also saw gains, with TSMC's stock rising more than 3% and AMD's shares increasing by over 7%. This shift is being hailed by analysts as a crucial milestone for both Nvidia and the broader U.S. tech sector.
Market analysts have provided optimistic forecasts regarding Nvidia's financial outlook, with Wedbush Securities' Daniel Ives calling it a ‘watershed moment’ for the AI industry. Melius Research analyst Ben Reitzes has revised Nvidia's price target upwards from $205 to $235, noting an anticipated recovery of approximately $8 billion in lost sales from China by fiscal Q4 2026. Furthermore, the company is projected to experience a remarkable 38% growth in revenue by fiscal 2027, building on a 59% increase anticipated for fiscal 2026, largely driven by pent-up demand in the Chinese market.
Huang’s meeting with top government officials indicates the administration's support for Nvidia's operations in China amid pressing geopolitical tensions. In this light, Nvidia's return to the Chinese market is not only pivotal for its recovery but also signifies a broader stabilization in U.S.-China tech relations relating to AI development.
Overall, Nvidia's restored access to the Chinese market positions it to capitalize on strong demand and enhances its growth prospects significantly as it continues to prioritize innovation and global market engagement.