Nvidia Corporation (NVDA) expected a smooth restart of chip sales to China this spring. Instead, it ran into a new and quiet barrier. Chinese customs officials ai-chips-clouding-stock-outlook">have blocked shipments of Nvidia’s H200 AI chips from entering the country. As a result, suppliers of key chip components have paused production. This move came just as Nvidia began ramping up output after receiving U.S. approval to sell the H200 in China.
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At first, the plan looked clear. The H200 is an older AI chip that met U.S. export rules. Chinese tech firms showed strong interest, and Nvidia expected more than one million orders. However, Chinese customs offices in Shenzhen told logistics firms they could not file clearance papers for the chips. Even though no public ban was announced, the effect was the same. Chips could not move forward.
Why This Matters for Nvidia and Investors
Due to the sudden halt, Nvidia’s suppliers halted production to avoid losses. This is important since many H200 parts are made only for that chip and cannot be reused. As a result, inventory risk rose fast. Meanwhile, Nvidia was caught off guard since shipments had already reached Hong Kong.
At the same time, policy signals inside China appear mixed. Several agencies oversee tech and AI policy, and views do not always align. Some groups want access to Nvidia chips to support AI work. Others want firms to rely more on local chips. This overlap has created delays and unclear rules, making buyers cautious.
Meanwhile, many Chinese customers have canceled H200 orders. Instead, some have turned to newer Nvidia chips like the B200 and B300, even though those chips are banned for export. This has pushed demand into gray markets, which adds more risk and cost.
Looking ahead, this episode shows that selling chips to China remains hard even when the rules seem clear. For Nvidia, China is still a large market, but access can change without warning.
Is Nvidia Stock a Buy, Sell, or Hold?
On the Street, Nvidia holds a Strong Buy consensus rating. The average NVDA stock price target is $263.44, implying a 41.46% upside from the current price.
