Nvidia’s (NVDA) stock is trading at an all-time high as investors cheer news that the company will soon resume sales of its H20 artificial intelligence (AI) microchip to China.
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NVDA stock was up 4% and trading at $172 a share at midday on July 15, an all-time high on a split adjusted basis. The move higher comes after the U.S. government softened its export curbs on Nvidia’s microchips and processors, allowing the company to resume sales to China.
The administration of U.S. President Donald Trump had told Nvidia in April of this year that it would require a license to sell its microchips and processors to China, effectively halting sales to that country. In its most recent earnings report, Nvidia said that export restrictions placed on its sales to China cost the company $8 billion in lost revenue.
Less Powerful Chips
However, the U.S. government now appears to be letting up on its export controls. “The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon,” the company said in a statement issued after markets closed on July 14.
Nvidia’s less powerful H20 microchip has been designed specifically to meet the U.S. requirements of sales to China. There are reports that Nvidia is working on a new AI chip for the Chinese market that is even less advanced and powerful than the H20 processor.
The change in the U.S. government’s stance comes after the U.S. and Chinese governments agreed to a preliminary trade pact that relaxes rare-earth export controls by China in exchange for easing technology export curbs by the U.S. NVDA stock is up 28% on the year.
Is NVDA Stock a Buy?
The stock of Nvidia has a consensus Strong Buy rating among 41 Wall Street analysts. That rating is based on 36 Buy, four Hold, and one Sell recommendations assigned in the last three months. The average NVDA price target of $176.76 implies 7.18% upside from current levels.
