TLDR
- Nvidia received U.S. government assurance to resume H20 AI chip sales in China after CEO Jensen Huang met with President Trump
- The H20 chip was previously blocked in April under new export rules, causing a $10.5 billion revenue impact across two quarters
- Nvidia stock jumped 4.7% in premarket trading following the news and crossed the $4 trillion market cap mark on July 9
- The company also introduced a new RTX Pro chip designed for factory automation and logistics using Blackwell architecture
- Analysts raised price targets, with Melius Research increasing their target from $205 to $235
Nvidia can breathe a sigh of relief. The chipmaker received assurance from U.S. authorities that it can resume selling its H20 AI chip in China.
The news came just days after CEO Jensen Huang met with President Donald Trump. The timing suggests the meeting went better than expected.
The H20 chip had been blocked since April under tightened U.S. export rules. This created a massive financial headache for the company.
Huang revealed in May that the ban caused a $10.5 billion revenue hit. The impact spread across both April and July quarters.
The CEO was in Beijing when the news broke. He met with top Chinese leaders during his trip.
Speaking to reporters there, Huang simply said “I’m very happy.” His brief comment hinted at the progress made during diplomatic discussions.
Shipments Set to Resume
Nvidia confirmed that H20 shipments will start again soon. The U.S. Commerce Department granted the necessary licenses.
The company also unveiled a new AI chip for the Chinese market. This RTX Pro model targets factory automation and logistics applications.
The new chip runs on Nvidia’s advanced Blackwell architecture. It’s specifically designed to meet current U.S. export requirements.
Stock Surges on China News
Nvidia stock jumped 4.7% to $171.78 in premarket trading Tuesday. The rally built on momentum from the company’s recent market cap milestone.
The stock crossed the $4 trillion market cap mark on July 9. This made Nvidia one of the world’s most valuable companies.
Shares are up 22% year-to-date despite earlier volatility. The stock had fallen as much as 30% in April before recovering.
Nasdaq and S&P 500 futures also climbed on the news. Both indexes gained 0.6% and 0.4% respectively.
Analysts rushed to update their price targets following the announcement. Melius Research raised their target from $205 to $235.
“The news not only means that Nvidia’s revenues accelerate even more sequentially in the back half of full-year 2026, but it also adds a huge tailwind to growth in the fiscal first half of 2027,” wrote analyst Ben Reitzes.
The analyst noted that Nvidia can now better compete with Huawei. This applies to both the China market and global operations.
Huang has previously argued that limiting access helps China’s Huawei. The CEO believes export restrictions provide financial resources to the rival company.
“If we don’t compete in China, and we allow the Chinese ecosystem to build a rich ecosystem because we’re not there to compete for it, and new platforms are developed and they’re not American at a time when the world is diffusing AI technology, their leadership and their technology will diffuse all around the world,” Huang said.
The Trump administration appears to be taking a more China-friendly stance. This represents a shift from previous export control policies.
Meta Platforms also announced plans for multiple data centers to power AI development. CEO Mark Zuckerberg revealed the first facility called “Prometheus” will come online in 2026.
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