TLDR
- Cathie Wood’s ARK Invest purchased 23,211 Nvidia shares worth $4.2 million on Monday across two ETFs
- Nvidia stock fell 1% Tuesday to $178.26 after hitting an all-time high Monday with a 3.6% surge
- The company is regaining access to Chinese markets with H20 AI chips after previous U.S. export restrictions
- Nvidia placed orders for 300,000 H20 chips from TSMC to meet strong Chinese demand despite performance limitations
- Chinese regulators raised security concerns about potential “backdoors” in H20 chips, which Nvidia has denied
Nvidia shares dropped 1% Tuesday to $178.26, pulling back from Monday’s all-time high after Cathie Wood’s investment firm increased its position in the chip giant.
Wood’s ARK Invest purchased 23,211 Nvidia shares worth approximately $4.2 million on Monday. The buying came through two exchange-traded funds: the ARK Autonomous Technology & Robotics ETF and the ARK Space Exploration & Innovation ETF.
The purchase represents Wood’s continued confidence in Nvidia despite the stock’s volatile trading pattern. Shares surged 3.6% Monday before Tuesday’s decline.
Nvidia now represents 2.7% of both ARK funds as their 13th and 14th largest holdings respectively. Wood’s funds had previously reduced Nvidia positions before the stock’s massive 2023 rally.
However, her flagship ARK Innovation ETF added hundreds of thousands of shares after President Trump’s tariff announcements in early April triggered a sell-off. The stock remains up 33% this year.
Other semiconductor stocks also declined Tuesday. Advanced Micro Devices fell 1.4% while Broadcom dropped 1.6%.
China Market Developments
Nvidia is working to regain its foothold in China’s lucrative AI chip market. The company is selling H20 AI chips designed to comply with U.S. export restrictions.
The chipmaker placed a substantial order for 300,000 H20 units from Taiwan Semiconductor Manufacturing Company. This large order reflects strong demand from Chinese customers despite the H20’s reduced performance compared to unrestricted models.
Experts believe Nvidia may struggle to fully recover its previous Chinese market share. Local competition from Chinese manufacturers has intensified during the export ban period.
Huawei’s 910C chip represents one domestic alternative that China actively promotes. Ongoing regulatory scrutiny also creates challenges for Nvidia’s market re-entry efforts.
Security and Regulatory Issues
Chinese regulators have raised security concerns about potential “backdoors” in Nvidia’s H20 chips. These backdoors could theoretically allow unauthorized access or control.
Nvidia publicly denied these allegations and stated its chips contain no such vulnerabilities. The company urged U.S. policymakers not to require location verification features that could compromise security.
Legal issues continue to surface around chip exports. Two Chinese nationals were recently arrested in California for allegedly smuggling Nvidia AI chips to China.
High-end Nvidia chips have reportedly entered China despite U.S. restrictions. These allegations persist as enforcement agencies monitor compliance with export controls.
The company maintains its commitment to serving Chinese customers within regulatory boundaries. This stance reflects China’s importance as a major market for AI hardware.
Nvidia recently became the first company to reach a $4 trillion market valuation. Soaring demand for AI infrastructure continues driving growth globally.
The company’s next quarterly earnings report is scheduled for August 27, 2025. Analysts will closely watch data center sales figures for continued growth indicators.
Nvidia placed a substantial order for 300,000 H20 chips from TSMC to meet strong demand in China, indicating ongoing efforts to remain competitive in the restricted market.
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