US approves H200 chip exports to 10 Chinese firms; NVDA poised for parabolic move as China re-enters revenue stream

In a striking reversal of prior semiconductor export controls, the US Department of Commerce issued approval for NVIDIA to sell its H200 high-performance computing chips to 10 Chinese enterprises. The timing coincided with President Trump's summit with Xi Jinping in Beijing, where trade and tech supply chains featured prominently. For NVIDIA, this was a potential game-changer: China had historically accounted for roughly 25% of the company's revenue, and that customer base had been effectively shut out since 2023 under stricter export restrictions imposed by the Biden administration.

The approval removes a significant overhang that had weighed on semiconductor valuations. Analysts quickly recalculated NVDA's addressable market and potential earnings upside with China re-entered as a customer. NVDA was trading near the highs of the week before the broader bond selloff began, and the H200 clearance added fuel to bullish momentumThe empirical fact that winners keep winning over the medium term.. CEO Jensen Huang had personally delivered the first DGX-1 supercomputer to Elon Musk at OpenAI in 2016, a symbolic moment of the deep ties between AI infrastructure and enterprise adoption; the H200 news suggested those ties might expand globally once again.

The decision also reflected a subtle shift in the Trump administration's framing of tech competition with China. Rather than an outright ban, the approach now permitted sales to approved entities, suggesting a more nuanced strategy: US companies retain market access (and revenue), but the US retains control over which Chinese firms can buy and implicitly what they can do with the chips. Semiconductor peers like AMD and Broadcom also stood to benefit from the strategic opening, though NVIDIA, as the dominant player in AI training hardware, would capture the lion's share of incremental demand.

The headwind, however, was the broader risk-off tone. NVDA, along with AMD and other chip names, sold off on Friday as the global bond selloff pressured growth equities. By day's end, NVIDIA was down 2-3% despite the H200 approval, a sign that macro forces (rising yields, inflationThe rate at which prices rise across an economy. worries) were temporarily outweighing the China upside. But forward-looking investors who saw the H200 approval as a turning point for the AI capex cycle began positioning for a potential reversal once macro volatility cooled. Earnings announcements from NVDA (scheduled for the following week) would be the critical catalyst to confirm whether management updated guidanceCompany-issued forecasts of future financial performance. to reflect the renewed China opportunity.