Nvidia (NVDA) has been navigating a tricky landscape in China, where regulatory restrictions and geopolitical tensions have clouded growth prospects for its AI-focused chips. With recent reports suggesting that some of these hurdles may be easing, investors are wondering whether Nvidia’s China problem is really over and how it impacts NVDA stock. Let’s break it down.
TipRanks Cyber Monday Sale
- Claim 60% off TipRanks Premium for data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
For context, NVDA stock made headlines after President Donald Trump approved the export of Nvidia’s high-performance H200 AI chips to select Chinese customers. However, the victory may be short-lived. Despite the U.S. green light, Beijing is reportedly expected to restrict access to Nvidia’s advanced H200 chips in China.
Nvidia’s China Problem Isn’t Over
The recent U.S. decision to allow the export of Nvidia’s H200 AI chips does not mean that the company’s challenges in China are over. The move reopens a major revenue channel that was mostly blocked by previous restrictions, with the H200 potentially bringing in billions in annual sales—though 25% of that revenue goes to the U.S. government.
There are, however, two major limitations. First, the H200 is already a generation behind Nvidia’s newest Blackwell chips, which remain banned in China, keeping the U.S. in control of the most advanced AI technology. Second, China is reportedly limiting large purchases of these approved chips, asking buyers to justify why they can’t use domestic alternatives. This aligns with Beijing’s long-term goal of AI chip self-sufficiency and poses a risk to Nvidia’s market share against local competitors like Huawei.
For U.S. investors, the picture is mixed. Nvidia gains a valuable but limited revenue stream, while geopolitical tensions and the growth of Chinese competitors continue to threaten its dominance in one of its most important markets.
What It Means for NVDA Stock
The development is modestly positive for NVDA stock. It removes a major uncertainty and reopens an important, though limited, revenue stream. Following the news, NVDA shares jumped, as Wall Street analysts project revenue upside for the company.
For long-term investors, this means the worst-case scenario—being completely shut out of China—has been avoided, supporting Nvidia’s leading role in the global AI infrastructure market.
Is Nvidia a Buy or Sell Stock?
According to TipRanks, NVDA stock has a Strong Buy consensus rating based on 39 Buys, one Hold, and one Sell assigned in the last three months. At $258.0, Nvidia’s average share price target implies a 39.5% upside potential.
