US Approves H200 Chip Sales to China: NVDA Gains 4.4% as 25% Revenue Stream Reopens

In a stunning reversal of prior U.S. export controls, the Biden administration approved Nvidia and other chipmakers to sell advanced H200 processors to a select group of 10 Chinese companies. This decision effectively restores access to a market that previously generated roughly 25% of Nvidia's total revenue, a massive unlock for the semiconductor giant at a time when AI capex remains the dominant equity market narrative. The approval occurred against a backdrop of President Trump's trip to Beijing and negotiations with Xi Jinping, signaling a potential thaw in U.S.-China technology competition.

Nvidia shares popped 4.4% on the news, though the rally was tempered by the broader global bond selloff and inflationThe rate at which prices rise across an economy. concerns that pressured all growth equities. Analysts noted that the H200 approval could add several billion dollars to Nvidia's 2026-2027 revenue, critical given that much of the recent 20% rally in NVDA since May 5 had already priced in strong earnings growth. The approval also signals potential relief for Broadcom (AVGO), AMD, and other semiconductor suppliers whose product portfolios had been constrained by China export bans. However, observers questioned whether geopolitical tensions could reverse the decision, especially given ongoing Iran war concerns and China's own semiconductor ambitions.

The semiconductor sector's reaction was mixed. AMD fell 3.3% as investors rotated away from cyclical growth names into value and dividend payers ahead of June. Broadcom held steady but saw options activity spike as traders bet on volatility ahead of earnings. The broader implication is that China-related chip export news has become a key driver of sector risk, with policy reversals creating both opportunity and uncertainty.

Skeptics warn that the approved H200 sales may represent a temporary political concession that could be reversed under pressure from China hawks in Congress or if U.S.-China relations deteriorate further. Some argue that opening high-end AI chip sales to China contradicts stated U.S. national security goals and may prompt congressional pushback. Additionally, China's own semiconductor manufacturers are rapidly improving, potentially reducing the long-term revenue benefit for U.S. chipmakers even if export bans are lifted.