US Approves H200 Chip Exports to China; NVDA Rallies as 25% Revenue Stream Reinstated

In a stunning policy reversal, the U.S. State Department approved the export of Nvidia's H200 accelerators to 10 Chinese firms, effectively reinstating access to what has been Nvidia's largest geographic market outside the U.S. The decision came amid President Trump's high-profile Beijing summit with Xi Jinping, signaling a willingness to negotiate trade restrictions that had been imposed under prior administrations' chip export control regimes. Nvidia CEO Jensen Huang was spotted in Beijing eating noodles on a street corner during the summit, underlining the company's pivotal role in shaping U.S.-China technology relations.

The H200 approval matters because China represented roughly 25 percent of Nvidia's total revenue prior to export restrictions. The absence of that revenue stream had been baked into analyst models for nearly two years, but the reinstatement of access fundamentally shifts the revenue trajectory. Traders immediately repriced NVDA higher, adding roughly $1 trillion to Nvidia's market capitalization over the week and pushing the stock within striking distance of $250 ahead of earnings on May 21. The approval also suggests that the Trump administration views controlled engagement with China on AI infrastructure as preferable to a complete technology embargo.

However, the approval carries important caveats and geopolitical risks. The 10 approved companies are subject to end-use restrictions and monitoring; Nvidia cannot simply flood China with chips. Additionally, the export approval stands in sharp contrast to the administration's hawkish posture on rare earths, semiconductors, and defense technology, creating ambiguity about the durability of the policy. If political winds shift or if Chinese companies are suspected of diverting chips to military applications, the approval could be rescinded. Furthermore, the pace of adoption by Chinese firms is uncertain; years of restriction may have driven some customers toward alternative suppliers or domestically developed chips.

The debate pits near-term earnings upside against long-term geopolitical tail risk. Bulls see the approval as a durable positive that will drive NVDA's earnings beats for years to come. Bears worry that it represents a one-time capitulation to Chinese pressure and that future restrictions, whether on H200 or next-generation chips, pose existential risks to Nvidia's growth narrative. The earnings call on May 21 will likely shape how traders view the sustainability of this revenue stream.