US Approves H200 Chip Exports to China; NVDA Surges as $1T Revenue Stream Restored

In a significant reversal of Trump-era export controls, the US Commerce Department approved NVIDIA's H200 advanced AI chips for sale to a select group of Chinese companies. This decision reinstates a major revenue stream that had been artificially constrained, with China historically representing approximately 25 percent of NVIDIA's total sales. The move comes amid Trump's broader negotiations with Chinese President Xi Jinping during a Beijing summit, signaling a tactical shift toward engagement on technology trade.

NVIDIA responded immediately, with shares climbing 4.4 percent on the news. The stock has now gained 20 percent since May 5, adding roughly $1 trillion in market capitalization and pushing NVIDIA toward a $5.7 trillion valuation. This acceleration into next Wednesday's earnings call raises the bar significantly; the market has already priced in substantial optimism, making execution critical. CEO Jensen Huang's previous statements on energy demand driving 1000x growth in compute infrastructure have resonated with the broader AI capex narrative.

The geopolitical subtext matters. The US simultaneously continues negotiations with Iran and maintains military posturing, yet approves sales to China. This contradiction underscores the complexity of managing Great Power competition while maintaining supply-chain stability and shareholder returns. Semiconductor exports have become a central lever in US-China relations, and approving H200 sales signals the administration values commerce over maximum pressure on Beijing.

Bull case: The China revenue stream reactivates demand for NVIDIA's most advanced chips, supporting sustained AI capex cycles. Bear case: Chinese competitors may accelerate home-grown alternatives, and geopolitical risk remains elevated. The stock's 20 percent run since May 5 has also raised questions about valuation cushion ahead of any earnings disappointment or macro headwinds.