US approves NVDA chip exports to China; semiconductor selloff reverses on regulatory clarity

In a surprising reversal of export restrictions, the US approved sales of advanced chips including NVIDIA's H200 to ten Chinese companies on May 15. The move comes during Trump's two-day visit to Beijing with Xi Jinping, creating the perception of a broader rapprochement on technology competition. China represented roughly 25% of NVIDIA's revenue before the ban, making the approval material for both current cash flow and forward guidanceCompany-issued forecasts of future financial performance. heading into next week's earnings.

Semiconductor stocks had been under pressure earlier in the week as geopolitical tensions spiked; Samsung's weakness in Seoul on North Korea tensions spilled into US futures, pressing chip indices lower. AMD fell 3.3% and NVDA 2.2% on the Friday selloff as traders worried that export bans were hardening. NVDA's reversal came swiftly after the approval, popping 4.4% as investors repriced the chip giant's exposure to China and the broader AI capex cycle. AMD followed suit as it wrestles with supply constraints vs. demand for data-center processors.

The approval is politically significant for Trump; it signals dealmaking prowess while avoiding the optics of a complete cave-in on China tech policy. Treasury yields rising also helped: higher real rates make long-durationBond price sensitivity to interest rate changes. growth assets cheaper, but chipmakers derive a large fraction of revenue from near-term capex cycles that are less sensitive to discount rates. The move also lifts confidence in the AI capex thesis; if China demand snaps back suddenly, US semis benefit from a reversion to normalized customer bases across cloud providers and AI training infrastructure.

However, skeptics note that the whitelist of ten firms is narrow, not a blanket opening. Geopolitical risk remains acute; any escalation in Taiwan tensions or new Iran flashpoints could reverse the approval overnight. NVIDIA's next-week earnings will be scrutinized for any China revenue guidanceCompany-issued forecasts of future financial performance.; consensus expects capex super-cycle tailwinds, but street is divided on timing and sustainability. AMD's own fab constraints may limit its ability to capitalize on demand surge.