Shares of chip giant Nvidia (NVDA) could fall further since its China chip sales have been stalled due to a U.S. security review. The Financial Times reported that the H200 AI chip shipments are still awaiting Washington’s approval on national security grounds. Over two months ago, President Donald Trump greenlit the sale of Nvidia’s H200 chips.
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In the meantime, Chinese customers are reportedly halting new orders for the H200 as uncertainty lingers over approvals, conditions, and import timelines. Suppliers have slowed production of H200 components as both countries are taking time for final approvals.
Nvidia Stock Movement
NVDA shares have been under pressure lately. Tensions are rising with ChatGPT maker OpenAI over stalled funding and the latter’s search for alternative AI inference chips. Shares fell 2.8% yesterday and are down 5.7% over the past five trading days. This follows a Reuters report that Nvidia may not commit to its planned investment of up to $100 billion in OpenAI.
Nvidia’s China Chip Sales in Limbo
According to the report, the U.S. Commerce Department has finalized its analysis of export controls on the powerful H200 AI chips. However, sources familiar with interagency deliberations stated that the State Department is advocating for stricter measures. Their aim is to prevent China from leveraging these advanced semiconductors in military or surveillance applications that could threaten U.S. national security.
Last week, Nvidia CEO Jensen Huang expressed hope that China would approve sales of Nvidia’s H200 AI chip soon, stating that the necessary license is in the final stages. Beijing is trying to cut reliance on American semiconductors and boost its domestic chip industry. Even so, China approved imports of its first batch of H200 AI chips at the end of January, signaling a policy shift.
Is NVDA a Good Stock to Buy Now?
Analysts remain bullish about Nvidia’s long-term outlook. On TipRanks, Nvidia stock commands a Strong Buy consensus rating based on 37 Buys, one Hold, and one Sell rating. The average Nvidia price target of $260.06 implies 44.2% upside potential from current levels. Over the past year, NVDA shares have surged nearly 52%.
