NVIDIA Stock Surges 4% as China Chip Sales Resume Amid Trade Deal
NVIDIA shares were trading near $171 in after-hours activity, maintaining gains as investors digest the implications of renewed Chinese
Quick overview
- NVIDIA shares rose 4.04% to $170.70 after announcing the resumption of H20 chip sales to China, a significant revenue opportunity.
- The stock shows strong bullish momentum, with technical analysis predicting a potential price target of $178 in the near future.
- The reopening of the Chinese market is crucial for NVIDIA, which previously anticipated a $15 billion revenue loss due to export restrictions.
- Congress is divided on the decision, raising concerns about the implications for U.S. export controls and China's AI capabilities.
On Tuesday, NVIDIA Corporation (NVDA) shares closed up 4.04% at $170.70, adding $6.63 per share on heavy trading volume of 230.63 million shares. This was after the AI chipmaker said it will start selling its H20 artificial intelligence processors to Chinese customers again.
After Commerce Secretary Howard Lutnick said that NVIDIA’s anticipated return to selling H20 chips to China is part of bigger U.S. talks over rare earth minerals, the stock price went up. “We put that in the trade deal with the magnets,” Lutnick told Reuters. He was talking to an agreement to start sending rare earths to U.S. producers again.
NVDA Technical Analysis Shows Strong Momentum
From a technical point of view, NVIDIA’s chart shows strong bullish momentum. The stock has gotten back above its 200-day moving average and made a “golden cross” pattern in late June, when the 50-day moving average crossed above the 200-day average. This is usually a hint that the stock will go up.
Technical analysts use bars pattern analysis to predict a price objective of about $178 in the near future, which is about 8% higher than where it is now. This estimate is based on how the stock has been moving from the low point in July.
Important support levels to keep an eye on include $159 (last month’s high), $150 (a key psychological level with historical relevance), and $143 (in line with mid-June consolidation patterns). During most of the current increase, the relative strength index has stayed close to the overbought level. This shows that prices are moving quickly even if trading volume has been low in recent months.
China Market Represents Crucial Revenue Stream
NVIDIA will make a lot more money now that H20 chip sales have started up again. The corporation had thought that export restrictions would cost them $15 billion in revenue, so the reopening of the Chinese market is a big deal for them. China brought in $17 billion in revenues for NVIDIA in the fiscal year that ended on January 26, which was 13% of all sales.
CEO Jensen Huang is in Beijing right now and talked about how important the Chinese market is for the company’s strategy. He said, “The Chinese market is huge, fast-changing, and full of new ideas, and it’s also home to a lot of AI researchers.” The H20 chips are less powerful than counterparts sold outside of China because of current constraints, but they still work with NVIDIA’s software environment, which is a big advantage for keeping their market share.
Market Impact and Sector Response
The news caused a bigger rise in AI semiconductor stocks. Advanced Micro Devices (AMD) rose 7% after saying it would start sending MI308 chips to China again, but only after getting a license. The sector’s reaction shows how important the Chinese market is for U.S. chip makers’ bottom lines.
Chinese businesses are apparently racing to get H20 chip orders, and internet titans ByteDance and Tencent are among those that might be applying. Experts say that the strategic effect will depend on how many chips are finally permitted for sale. If a lot of chips are exported, it might have a big effect on the global AI competitive environment.
Congressional Concerns and Regulatory Scrutiny
Congress is criticizing the decision from both sides. Democratic Representative Raja Krishnamoorthi said the move was “dangerously inconsistent” with previous export control positions. Republican John Moolenaar, on the other hand, warned about the H20’s role in improving Chinese AI capabilities, pointing out that DeepSeek, a Chinese startup that says it has cost advantages over U.S. companies like OpenAI, uses it.
NVIDIA’s ESG and Long-term Positioning
NVIDIA’s $4 trillion market valuation, which makes it the most valuable firm in the world, draws more scrutiny from ESG groups. Because the corporation makes up 7.3% of the S&P 500, its sustainability practices have a direct effect on thousands of funds and ETFs. NVIDIA has promised to use only renewable electricity and has set science-based emissions objectives. This makes it a leader in developing technology that is good for the environment.
NVIDIA’s sales forecast of $45 billion for the second quarter of fiscal 2026 shows that demand is still high, even though there are some regulatory issues. The company is the leader in AI infrastructure and has formed key alliances with major cloud providers. This means that the current trend may continue, as worldwide spending on AI is expected to reach $200 billion by 2028.
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