Nvidia (NVDA) and Advanced Micro Devices (AMD) just agreed to hand over 15% of their China chip sales to the U.S. government to secure export licenses. It’s kind of an unprecedented move, because it’s like the government suddenly demanding a cut of your side hustle.
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In any case, this deal shakes up the semiconductor landscape, raising questions about investment risks and opportunities for both of these giants, as well as Intel (INTC), which could be next in line. Let’s dive into what this means for each and who else might feel the heat.
Nvidia (NASDAQ:NVDA) | The AI Giant’s Costly Compromise
Nvidia is riding high as the AI chip overlord these days, as its H20 chip, designed for China’s market, is set to fetch billions. Last fiscal year, China accounted for $17 billion, or about 13% of Nvidia’s total sales. Now this 15% revenue-sharing deal will indeed slice into margins, potentially cutting 5-15 percentage points off gross profits for H20 sales. But before you wince, it might actually be a fair price for Nvidia to pay to keep China’s massive market open after a sales halt cost them $8 billion in Q2 alone. Jensen Huang’s meeting with Trump last week sealed this deal, showing Nvidia’s willingness to play ball to avoid stricter export bans.
What’s interesting here is that this deal sets a precedent. If Nvidia’s coughing up cash for export licenses, what stops the government from upping the ante? Analysts like Bernstein’s Stacy Rasgon call it a “slippery slope,” warning that strategic concessions could erode Nvidia’s edge if China leans harder on domestic players like Huawei. But for now, Nvidia’s AI dominance keeps it a strong buy among growth-oriented portfolios.
Is NVDA Stock a Buy, Hold, or Sell?
Currently, the overwhelming majority of analysts covering NVDA stock are bullish. The stock carries a Strong Buy consensus rating, based on 35 Buy, three Hold, and just one Sell ratings assigned over the past three months. Still, NVDA’s average stock price target of $188.86 implies a ~3% upside over the next twelve months, meaning Wall Street believes NVDA is already priced to perfection.
AMD (NASDAQ:AMD) | The Underdog’s Delicate Dance
AMD isn’t the 800-pound gorilla in the room, but Nvidia is. For AMD, China remains a big deal, making up $6.2 billion, or a quarter of its 2024 revenue. The MI308 chip, which was specifically tailored for China, now carries the same 15% revenue tax to secure export licenses. This deal, greenlit after months of export restrictions, will enable AMD to dodge a projected $1.5 billion revenue hit this year. Dr. Lisa Su’s team is betting on AI growth, with investors seeming to be hyping their Helios rack system for demanding workloads. Of course, the levy could shave a point off AMD’s overall margins, which might be a tougher pill for a company with less pricing power than Nvidia.
Still, what’s intriguing is AMD’s momentum. For instance, there’s Meta’s (META) nod to AMD’s chiplet roadmap, signaling enterprise traction. Yet, this deal raises risks because if the U.S. tightens controls again or China pivots to local chips, AMD’s exposure could end up being somewhat damaging. So while you might see deeper value in AMD’s lower valuation compared to Nvidia, the revenue-sharing adds uncertainty to its outlook. Keep an eye on export license updates, as AMD’s agility could either shine or stumble here.
Is AMD Stock a Good Buy?
On Wall Street, AMD stock carries a Moderate Buy consensus rating based on 25 Buy and 12 Hold ratings. No analyst rates AMD stock a Sell. AMD’s average stock price target of $183.28 implies less than 1% downside potential over the next twelve months.
Intel (NASDAQ:INTC) | The Next in Line
Intel is not part of this revenue-sharing deal yet, but the spotlight could now turn on them. Yesterday, CEO Lip-Bu Tan met with President Trump at the White House, a high-stakes sit-down after Trump called him “highly conflicted” over alleged China ties.
The meeting, described as “candid and constructive” by Intel, included Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent, with Trump praising Tan’s “amazing story” afterward, per a Truth Social post. Intel’s stock popped on the news, which implies that investors see a thaw in tensions, but the risk of a revenue-sharing mandate looms as the U.S. pushes chipmakers to align with national interests.
Intel’s China revenue isn’t as AI-chip-driven as Nvidia’s or AMD’s, but it relies heavily on the region for manufacturing and sales. Any mandate to share revenue could hit Intel’s already strained margins and erode its investment case further, especially after a $1.6 billion Q2 2025 loss. Management is now focused on a turnaround, cutting jobs and scaling back factory plans, but future political scrutiny could certainly derail progress.
Is INTC a Good Stock to Buy?
Intel is currently covered by 30 Wall Street analysts, most of whom hold a bullish outlook. The stock has a Hold consensus rating with one analyst assigning a Buy, 26 a Hold, and three a Sell rating over the past three months. INTC’s average price target of $21.97 suggests ~2% upside potential over the next twelve months.
What Will Tariffs Do to Other Stocks?
Note that this deal’s ripple effects could touch other chipmakers like Qualcomm (QCOM) or Broadcom (AVGO), who also sell to China. If the U.S. sees this as a cash cow, expect more firms to face similar terms. China’s chip market is projected to hit $300 billion by 2030, so the stakes are massive.
Smaller players like Marvell Technology (MRVL), with less China exposure, might skate by, but anyone in AI or 5G could be next. I believe that today’s insane GPU demand hints at broader sector impacts, so watch for policy shifts as Trump’s transactional style could reshape tech’s global playbook.
A New Era of Chip Politics
This revenue-sharing deal is a curveball for Nvidia, AMD, and potentially Intel, blending national security with economic arm-twisting. I believe Nvidia’s deep pockets can absorb the hit, but AMD’s higher reliance on China makes it more vulnerable. Intel’s recent Trump meeting eased some fears, but let’s not forget its turnaround remains fragile amid potential policy pressures.
You should weigh growth potential against geopolitical risks. Still, for now, I view Nvidia as a juggernaut, AMD as offering value with caveats, and Intel as a wildcard that needs some stability to find its footing. As the U.S. flexes its muscle, this could redefine tech investing, where the knives of geopolitics now cut as deeply as innovation.