Nvidia stock eyes fresh record with AI chipmaker set to resume sales in China after US ban

Nvidia (NVDA) shares surged over 4% after the company announced it is applying to resume sales of its H20 GPUs in China, citing assurances from the US government that licenses will be granted. This development is critical as the prior ban cost Nvidia $2.5 billion in Q1 FY26, and analysts project a strong resumption of sales in China, which accounts for 13% of its revenue, could add $0.40-$0.50 to its 2026 per-share earnings. The move, alongside rival Advanced Micro Devices' similar plans, signals a potential easing of US export controls on AI chips for the crucial Chinese market.

Analysis

Nvidia's stock surged over 4% to trade above $171 after the company announced it is applying to resume sales of its H20 GPUs to China, citing assurances from the US government that licenses will be granted. This development is a significant reversal of a major headwind, as a prior ban implemented in April cost Nvidia $2.5 billion in lost sales for Q1 FY26 and was projected to cause an $8 billion loss in Q2. The potential reopening of the Chinese market, which constituted approximately 13% of the company's FY25 revenue, materially improves the near-term financial outlook. An analyst from Bernstein projects that a resumption of sales could lead to a substantial revenue catch-up in the second half of the fiscal year, potentially adding $0.40-$0.50 to FY26 EPS if China-related revenue reaches $15-$20 billion. This news, coupled with rival AMD's stock rising over 8% on similar plans, suggests a potential easing of US export controls on AI chips for the entire sector, signaling a pivotal moment given the geopolitical tensions and CEO Jensen Huang's recent high-level meetings.

Key Decisions for Investors

• The potential resumption of sales to China substantially de-risks Nvidia's near-term revenue forecast, providing fundamental support for the stock's recent rally and its market capitalization exceeding $4 trillion.
• Investors should monitor for official confirmation of the license approval and subsequent sales figures, as the realization of an estimated $0.40-$0.50 accretion to FY26 EPS is contingent on successfully ramping up shipments to China in the second half of the year.
• While this is a strong positive catalyst, the situation remains subject to geopolitical risk; therefore, portfolio positioning should also consider the broader sector implications, as a policy shift benefiting Nvidia would likely extend to competitors like AMD.