Semiconductor stocks surged Tuesday following confirmation that Nvidia (NVDA) can resume exports of its H20 AI chip to China.
The move could recover over $10 billion in lost revenue this year and reshape the competitive landscape in global AI hardware.
Nvidia’s H20 Chips Set for Takeoff After Licensing Reversal
Nvidia shares soared over 4% after the company announced it expects to resume shipments of its H20 processors to China, following U.S. government assurances that export licenses will be approved. The news comes just months after the Trump administration abruptly tightened restrictions, effectively banning the chip in April.
Designed to comply with earlier export rules, the H20 was built specifically for the Chinese market after more powerful GPUs like the H100 were prohibited. But the April decision halted deliveries entirely, costing Nvidia as much as $8 billion in expected second-quarter revenue and leading to a $4.5 billion inventory write-off.
Now, with CEO Jensen Huang fresh off meetings with President Trump and Chinese officials, the pendulum has swung again. Analysts from NewStreet Research estimate the restored access could add more than $10 billion to Nvidia’s fiscal 2025 revenue. Combined with momentum from hyperscaler data center buildouts and new product ramps like the RTX PRO, Nvidia is back on offense in Asia’s $50–60 billion AI market.
Nvidia shares soared over 4% after the company announced it expects to resume shipments of its H20 processors to China, following U.S. government assurances that export licenses will be approved. The news comes just months after the Trump administration abruptly tightened restrictions, effectively banning the chip in April.
Designed to comply with earlier export rules, the H20 was built specifically for the Chinese market after more powerful GPUs like the H100 were prohibited. But the April decision halted deliveries entirely, costing Nvidia as much as $8 billion in expected second-quarter revenue and leading to a $4.5 billion inventory write-off.
Now, with CEO Jensen Huang fresh off meetings with President Trump and Chinese officials, the pendulum has swung again. Analysts from NewStreet Research estimate the restored access could add more than $10 billion to Nvidia’s fiscal 2025 revenue. Combined with momentum from hyperscaler data center buildouts and new product ramps like the RTX PRO, Nvidia is back on offense in Asia’s $50–60 billion AI market.
AMD Surges on Expectations of Similar Export Approvals
Advanced Micro Devices (AMD) rode Nvidia’s coattails Tuesday, gaining more than 7% on hopes that it too will benefit from the licensing thaw. While Nvidia leads in high-performance AI chips, AMD has developed its MI308 series for export to China under modified specifications, mirroring Nvidia’s strategy with the H20.
Bloomberg reports that the U.S. Commerce Department is signaling support for AMD’s pending applications, potentially paving the way for the company to tap the same reopened demand from Chinese hyperscalers and cloud players. Analysts suggest that if AMD is cleared, it could mark a meaningful new revenue stream and reduce risks tied to future U.S.-China tech flare-ups.
AMD, which has lagged Nvidia in AI chip sales but gained ground with custom accelerators, now finds itself in a stronger geopolitical and commercial position. Investors took note, pushing the stock to its best single-day performance in months.
Diplomacy, Supply Chains, and Strategic Chess Moves
The rapid reversal on chip export policy appears rooted in a broader recalibration of U.S.-China relations. Treasury Secretary Scott Bessent confirmed that easing chip controls was a key lever in trade negotiations, which also saw China lift curbs on rare-earth mineral exports—a vital supply for global semiconductor manufacturing.
Inside the U.S., Huang’s argument resonated: restricting U.S. chips only drives Chinese firms toward domestic champions like Huawei. Nvidia estimates it lost nearly half its China market share after the ban. The return of H20 and RTX PRO chips—albeit lower-powered models—could claw back ground, particularly as Chinese firms invest heavily in industrial AI applications such as smart factories and digital twins.
Still, the political climate remains volatile. Trump's AI advisor David Sacks described the H20 as “deprecated” and insisted the policy shift doesn't signal full normalization. Chinese buyers remain cautious, with analysts warning that policy “whiplash” could lead to greater long-term investment in homegrown alternatives.
A $4 Trillion Giant Reasserts Its Dominance
Nvidia’s stock reached another all-time high Tuesday, a fitting capstone to its rapid rebound from April’s regulatory shock. With the Biden and Trump administrations both using chip exports as diplomatic tools, Nvidia’s ability to navigate political headwinds is becoming as critical as its technological edge.
For AMD, the door to China isn’t fully open yet—but if it swings wider, the company could see a transformative tailwind.
Investors are betting that the AI infrastructure boom has many legs—and with Washington showing signs of pragmatism, the road to China just got a little clearer.
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