NVIDIA Corporation (NASDAQ:NVDA) announced Monday evening that it will soon resume sales of its H20 processor in China, signaling a positive shift in trade relations between the U.S. and China. This update follows recent meetings between CEO Jensen Huang and officials from both countries.
In addition, Nvidia introduced a new graphics processing unit tailored specifically for the Chinese market, designed to power AI-driven smart factories and logistics operations. The news propelled Nvidia shares up 4.8%, reaching $171.87 by 10:33 AM ET on Tuesday.
In a company statement, Huang confirmed Nvidia is “filing applications to sell the Nvidia H20 GPU again,” noting that the U.S. government has assured the company that necessary licenses will be granted. This development comes after Washington eased several export restrictions on chip technology to China, with chip design companies such as Synopsys (NASDAQ:SNPS) also recently allowed to resume sales there.
Earlier this year, Nvidia was effectively barred from selling the H20 chip in China amid escalating trade tensions and stricter licensing rules imposed by the Trump administration. The company had warned these restrictions could lead to at least $5.5 billion in charges, given China’s importance as a market.
However, recent agreements in May and June between Washington and Beijing to reduce trade tariffs have helped ease the strain. The H20 chip, crafted under the Biden administration’s guidelines, remains highly sought after by Chinese AI developers, including major firms like DeepSeek, Tencent, Baidu (NASDAQ:BIDU), and Alibaba (NYSE:BABA).
Nvidia CEO Huang has criticized U.S. export controls on China as a “failure,” stressing the importance of maintaining access to the Chinese market.
Analyst Sebastien Naji from William Blair projects this renewed access could boost Nvidia’s earnings per share by about $0.30 in fiscal 2026. He stated, “We see an opportunity for $0.30 in additional EPS in fiscal 2026 assuming China revenue of roughly $20 billion for the full year,” up from $17.1 billion in fiscal 2025. Naji also expects this development to enhance Nvidia’s gross margins in the latter half of the year, helping the company achieve its mid-70% non-GAAP gross margin target and potentially exceed the current full-year forecast of 70.3%.
Following the announcement, several brokerages raised their price targets for Nvidia stock. Oppenheimer’s Rick Schafer increased his target to $200 from $175, Melius Research’s Benjamin Reitzes lifted his target to $235, and DZ Bank set a new target price of $195.
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