Nvidia and AMD Shares Jump With Sales Set to Resume to China. Is It Too Late to Buy the Stocks?

The U.S. is easing chip export restrictions to China, significantly benefiting Nvidia and AMD by reopening a critical market for their AI chips. Nvidia expects to resume sales of its H20 GPUs, designed for prior compliance, after receiving assurances of license approvals, potentially recovering billions in revenue previously at risk, including a $5.5 billion hit. Similarly, AMD anticipates restarting shipments of its MI308 chips, which were also tailored for the Chinese market, mitigating up to $800 million in lost revenue. This policy reversal expands both companies' total addressable markets and is expected to add substantial incremental sales.

Analysis

A significant U.S. policy reversal to ease chip export restrictions to China presents a material positive catalyst for both Nvidia and Advanced Micro Devices. This development reopens a critical market, directly impacting near-term revenue forecasts. For Nvidia, the market leader with a 92% share of the GPU market in Q1, the resumption of H20 GPU shipments is poised to recover a potential $5.5 billion revenue shortfall. This event reinforces its dominant position, which is further entrenched by its proprietary CUDA software ecosystem. Beyond this immediate tailwind, Nvidia is also pursuing new verticals with its RTX PRO GPU aimed at industrial automation. For AMD, the policy shift allows for the resumption of its MI308 AI chip sales to China, mitigating a previously forecasted revenue loss of up to $800 million. While this provides incremental growth, the core long-term investment thesis for AMD remains centered on its strategic positioning in the AI inference market and its participation in the open UALink standard, which aims to challenge Nvidia's closed ecosystem. The move signals a broader de-escalation in tech trade tensions, though the situation remains fluid and dependent on geopolitical developments.

Key Decisions for Investors

• Investors should re-evaluate revenue models for both Nvidia and AMD to account for the immediate expansion of their total addressable market and the recovery of previously at-risk sales in China.
• For Nvidia, this development acts as a primary bullish catalyst, solidifying its market leadership and justifying its valuation premium, given the potential $5.5 billion revenue recovery and entrenched CUDA platform.
• For AMD, view this as a positive incremental de-risking event that mitigates an $800 million revenue headwind, but recognize that its long-term appreciation is still primarily contingent on gaining share in the AI inference market.
• Closely monitor U.S.-China trade relations and Commerce Department licensing approvals, as the positive outlook for both chipmakers is highly sensitive to the durability of this policy shift.