Nvidia (NVDA) may have just ignited the next phase of the AI-driven bull market after receiving assurances from Washington that it can resume shipping chips to China, removing a major obstacle for the company.
“NVDA started the domino of AI upside as the China market has reopened for business,” wrote Daniel Newman, CEO of The Futurum Group.
After a period of restricted sales to China due to the U.S.-led trade war, Nvidia is now poised to re-enter the world’s second-largest economy.
U.S. officials have confirmed they will approve export licenses for Nvidia’s H20 AI accelerators.
That's a less advanced chip designed to comply with earlier U.S. export restrictions, which were further tightened by the Trump administration in April.
Newman said that resuming shipments to China could reopen a $5 billion quarterly revenue stream for Nvidia.
The “domino” Newman refers to is the ripple effect Nvidia has on the broader AI ecosystem.
Companies like Taiwan Semiconductor Manufacturing (TSMC), Broadcom (AVGO), and Arm Holdings (ARM) — all deeply connected to Nvidia’s supply chain — stand to benefit both directly and indirectly from this renewed access to China.
The policy shift from Washington comes as Nvidia CEO Jensen Huang continues to champion the AI industry in both the U.S. and China, emphasizing the transformative impact the technology promises to deliver.
“General-purpose, open-source research and foundation models are the backbone of AI innovation,” Huang said, adding that every model should run on the U.S. tech stack.
Nvidia stock hits record highs amid China breakthrough
Nvidia shares surged to a new all-time high above $170 after news broke that shipments of its H20 GPUs to China can resume.
Perhaps even more astonishing is the company’s market capitalization, which has ballooned to a staggering $4.2 trillion.
As Investors Observer reported, Nvidia is now worth more than the entire German stock market, an impressive feat considering Germany is the world’s third-largest economy.
Despite its lofty valuation, Nvidia stock has continued to climb up over 23% year-to-date and 33% over the past 12 months. Since its tariff-driven slump in early April, the stock has rebounded by 80%.
The next major catalyst for Nvidia will come at the end of August, when the company reports second-quarter earnings for fiscal year 2026.
During its Q1 earnings call, Nvidia projected second-quarter revenue of $45 billion, plus or minus 2%. That forecast already accounts for an estimated $8 billion hit due to the H20 chip restrictions.
Your email address will not be published. Required fields are markedmarked