Huawei is firing up its chip factories just as Nvidia (NVDA) packs its bags. The Chinese tech giant is prepping to mass-produce its Ascend 910C AI chips. This aims squarely at Nvidia’s H100 dominance. Meanwhile, Nvidia is shifting key operations out of China, betting $500 billion on building up U.S. manufacturing muscle. This tug-of-war isn’t just about chips—it’s about control of the AI future.
Tariffs and Export Bans Force Nvidia’s Hand
Nvidia’s move isn’t a whim. U.S. export controls slammed the door on selling its top-shelf H20 chips to China without a license. That triggered a $5.5 billion charge in Q1 Fiscal 2026. The message was clear—sticking with China would come at a steep price.
So Nvidia is writing a massive check to reshape its supply chain. The company’s $500 billion investment includes ramping up chip production with partners like TSMC and Foxconn in Arizona and Texas. Its Blackwell chips are already rolling out from TSMC’s Arizona plant. It seems to be a whole new chapter.
China Doubles Down with Domestic Alternatives
But Beijing isn’t taking this shift lying down. Chinese regulators have opened investigations into Nvidia’s practices, according to CNN. At the same time, Huawei is racing to replace Nvidia’s presence. Its upcoming Ascend 910C chip, designed to rival Nvidia’s H100, is set for mass production soon, Reuters reports. China’s push for homegrown tech is in full throttle.
Yet Nvidia’s footprint in China remains, though smaller. China made up 13% of Nvidia’s revenue in 2025, down from 26% in 2022. Even with plans to move away, China’s manufacturing roots still run deep.
Nvidia Stock Stays Strong but Faces New Risks
Despite the geopolitical storm, Nvidia’s stock has kept its swagger. Shares are up nearly 70% year-to-date. But cracks are forming beneath the surface.
The looming $5.5 billion hit from export restrictions is a reminder that Nvidia’s China business still matters. Cutting off such a large market could weigh on revenue growth in the coming quarters. China’s slice of Nvidia’s revenue has already shrunk from 26% in 2022 to 13% this year. But that’s still billions on the table.
Is Nvidia Stock Still a Buy?
On TipRanks, Nvidia currently boasts a Strong Buy consensus rating, backed by 37 Buy recommendations and just five Holds. Analysts are targeting a 12-month average NVDA price of $168.49, implying a 58% upside from here.
