"The potential policy shift matters because Nvidia's H20 chip, designed specifically for the Chinese market, has been effectively shut out. The Commerce Secretary confirmed strict U.S. licensing terms for H200 AI chip exports to China, and Q2 FY26 results showed zero H20 sales to China due to export restrictions. That's billions in revenue left on the table for a company trading at 46.68x trailing earnings with a $4.63 trillion market cap."
"If restrictions ease on prior-generation chips, Nvidia recaptures a massive addressable market without cannibalizing its Blackwell architecture sales to U.S. hyperscalers. CEO Jensen Huang has been clear about extraordinary demand for next-gen products, and older chips would provide significant margin expansion. China revenue would be pure margin expansion. The timing is strategic. Big tech is pouring nearly $700 billion into AI capital expenditures, and analysts estimate Nvidia could capture 40-50% of that spending."
Nvidia shares rose 9.11% over the past week on signals Washington may ease export restrictions for older AI chips to China. The stock closed at $190.05 on February 11 ahead of Q4 earnings on February 25. U.S. licensing terms have effectively blocked the H20/H200 chip from the Chinese market, producing zero H20 sales to China in Q2 FY26 and leaving billions in potential revenue. Easing restrictions on prior-generation chips could recapture China demand without cannibalizing Blackwell sales, expand margins, and add an estimated $5–10 billion annually. Analysts expect Nvidia to capture 40–50% of nearly $700 billion AI capex.
Read at 24/7 Wall St.
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