Nvidia shares gain as Trump allows some AI chip sales to China

Nvidia shares rose 1.7% in U.S. premarket trading on Tuesday after President Donald Trump said he will allow the sale of its H200 chips to approved Chinese customers, easing concerns over access to one of its biggest markets.

AI Brief

US permits Nvidia's H200 AI chip exports to China with a 25% tariff while banning top-tier processors.
Analysts say impact may be limited unless other advanced chip lines are approved, as AMD and Intel also affected.
China ramps up domestic chip manufacturing as global tensions reshape AI supply chains.

Trump's decision appears to settle a debate over whether Nvidia and its rivals should keep their global lead by selling their AI chips to China or withhold shipments.

It is unclear whether the move will result in new sales after Beijing told companies not to use U.S. technology.

The restrictions banned the sale of advanced AI processors to China, weighing on Nvidia's growth despite strong global demand.

"The U.S. has gone back and forth on restrictions, and may do so again in the future, but now we foresee at least a path to meaningful future AI revenue from China," Morningstar analysts said in a note.

The export of the H200 chips, the company's second-tier AI chips, will be permitted with a 25% fee levied on such sales, Trump said in a post on Truth Social on Monday.

However, Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said the approval alone may have limited impact on Nvidia's business in China unless it is allowed to export other chip lines such as Blackwell or Rubin.

The U.S. Commerce Department is finalizing details and the same approach would apply to other AI chip firms such as Advanced Micro Devices and Intel, Trump added.

AMD and Intel rose 1.3% and 0.8% respectively in early premarket trade.

China is also accelerating its domestic chip manufacturing capabilities to reduce reliance on Nvidia.

There is "no guarantee" that the H200 will be widely adopted by the Chinese ecosystem versus domestic parts, Morningstar added.

So far this year, Nvidia has risen nearly 40% compared with the S&P 500 benchmark index's 16.4% rise in the same period.