Nvidia May Be Able to Sell Its Top AI Chips to China
Nvidia stock is climbing today after Trump announced he is looking into permitting sale of the H200 chips to China.
Quick overview
- Nvidia (NVDA) stock increased by 1.79% after President Trump indicated he is considering allowing the sale of advanced AI chips to China.
- Despite the potential approval, challenges remain as the Chinese government encourages local AI product purchases over imports.
- Nvidia's recent earnings report showed a 66% year-over-year sales increase, but the stock has been trending bearish overall.
- The decision on whether to permit sales of Nvidia's H200 chips to China is currently pending on Trump's desk.
Nvidia (NVDA) stock rose 1.79% on Monday after President Donald Trump said he was deciding whether to allow the company to sell its advanced artificial intelligence chips to China.
The Trump administration and China have both pushed Nvidia out of the Chinese market for different reasons. However, there is hope that the company will be able to penetrate that market once more with its advanced AI chips in the near future.
NVDA stock rose today as Trump said he was speaking to many different advisors about the possibility of permitting Nvidia to sell some of its higher end chips in China. Even if he gives the okay, there is still the problem of the Chinese government pushing back against foreign computer companies. Recently, the government has been urging its citizens to buy locally produced artificial intelligence products instead of importing them.
Nvidia’s H200 artificial intelligence chips is the product that is in question here. If Trump gives his approval for Nvidia to sell them, then years of restrictions between the United States and China will have been lifted. Under the Biden administration, Nvidia was being limited as to where they could sell their higher end chips for fear of creating a strong tech rival.
Nvidia’s Recent Performance
Last Wednesday, Nvidia published its quarterly earnings report, showing that they earned $57B in the third fiscal quarter. The company’s sales have improved by 66% year-over-year, but that was not enough to keep the company’s stock price high. Their stock fell 4% following the earnings statement, which fed the fear that AI companies are part of a bubble that is about to burst.
The company’s stock is up to $182 per share right now, but it may be headed for another dip soon. That has been the pattern lately, with the stock trending bearish overall but with several upticks. Since November 10th, the stock has been bearish, moving from $199 to $178 in a period of two weeks.
Nvidia stock will likely jump if Trump makes a decision in their favor. He will be looking to appease China as a trade partner but will also be wary of letting China outpace the United States in AI technology. U.S. Commerce Secretary Howard Lutnick said that the decision to permit sales to China is on Trump’s desk, and it will be up to him to decide if the U.S. moves forward with talks about selling H200 chips to their trade partner.
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