The U.S. Commerce Department has started issuing licenses to semiconductor company Nvidia (NVDA) to export its H20 chips to China. The news was first reported by the Financial Times. NVDA stock, which has advanced more than 14% over the past month and 36% year-to-date, is expected to move higher on this development, as it removes a major hurdle for the company in one of its key markets. The news comes after Nvidia CEO Jensen Huang reportedly met U.S. President Donald Trump on Wednesday.
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H20 Chip Exports Expected to Boost Nvidia’s Revenue
Nvidia had developed the H20 chip for the Chinese market following the export controls imposed by the Biden administration on more advanced artificial intelligence (AI) chips.
In April 2025, the Trump administration took a tougher stance by deciding that Nvidia would not be allowed to sell the H20 chips to China. However, Trump reversed his stance after a meeting with CEO Huang.
The resumption of H20 shipments to China is expected to be very beneficial for Nvidia, as it is a key market for the chip company. Nvidia had earlier warned that the H20 chip export ban would adversely impact its July quarter sales by $8 billion. In May, the company said that the H20 chips generated $4.6 billion in sales in the first quarter, with revenue from China accounting for 12.5% of its overall revenue.
Nvidia Stock Could Trend Higher Ahead of Q2 Earnings
The news that Nvidia has been granted licenses for H20 chip exports to China could drive NVDA stock higher. The stock has gained momentum due to several positives, including continued demand for its GPUs amid the ongoing AI wave and the launch of OpenAI’s GPT-5, which is expected to benefit Nvidia’s chip sales. Also, Tesla’s (TSLA) decision to shut down its custom-built AI training supercomputer Dojo team is being seen as a positive for Nvidia.
Nvidia is scheduled to announce its results for the second quarter of Fiscal 2026 on August 27. Wall Street expects Nvidia to report earnings per share (EPS) of $1, reflecting a 47% year-over-year growth. Revenue is projected to rise by 52.3% to $45.7 billion.
Is NVDA Stock a Good Buy?
With solid AI tailwinds and the lifting of the H20 chip export restrictions to China, Wall Street has a Strong Buy consensus rating on Nvidia stock based on 34 Buys, three Holds, and one Sell recommendation.
The average NVDA stock price target of $186.24 indicates 1.9% upside potential from current levels.
