Nvidia (NVDA) is once again dealing with a setback in China. According to a report in the Financial Times, the Cyberspace Administration of China told firms such as ByteDance and Alibaba (BABA) not to use Nvidia’s RTX Pro 6000D chip. The chip was made to fit China’s trade rules after earlier export curbs from the United States.
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In reply to the report, Chief Executive Officer Jensen Huang said he was disappointed. He added that Nvidia can only serve a market if the country wants it to. He also said that while Nvidia gave much to China, the matter is now tied to broader talks between China and the United States.
A Business on Shaky Ground
The timing comes months after a deal struck in August between the Trump White House and Nvidia. The deal allowed sales of Nvidia’s H20 chip to China, but it also set a rule that 15% of those sales would go to the United States government. The move was meant to ease trade strain while keeping U.S. control over advanced parts.
Yet, Nvidia has already told analysts not to count on China when considering future sales. Huang said the firm’s track record in China has been a rollercoaster. The newest move by Beijing makes that view even clearer.
Added Strain from Regulation
At the same time, China’s State Administration for Market Regulation has begun a probe into Nvidia’s past buyout of Mellanox, which builds parts for data centers. The review adds more strain for the chipmaker, as it now faces both sales limits and added oversight.
In the end, Nvidia’s China sales remain in flux. The firm is leaning more on other regions, while China steps up its own chip drive. The next steps will likely rest on the talks between the two governments, not just on one firm’s plans.
Is Nvidia Stock a Buy?
Nvidia continues to hold the Street’s endorsement with a Strong Buy consensus rating. The average NVDA price target is $211.11, implying a 23.37% upside from the current price.
