Nvidia Secures Key Approval to Resume Advanced AI Chip Exports to China

In a significant regulatory shift, Nvidia has received authorization from U.S. authorities to resume shipments of its high-performance artificial intelligence chips to verified customers in China. This move ends an export ban that had been in place since April 2025, reopening a critical sales channel for the semiconductor giant. The green light specifically covers the company's H200 data center GPUs, with the first substantial deliveries slated to begin in February 2026.

Shipments Set to Generate Billions in Revenue

Preparations are underway for an initial shipment wave of between 40,000 and 80,000 H200 processor units. With an estimated unit price of $32,000, this batch alone represents a potential revenue boost of $1.28 billion to $2.56 billion. The company plans to initiate these deliveries ahead of the Chinese New Year holiday in mid-February, utilizing existing inventory to meet the timeline. Consequently, this revenue is expected to be recognized within the first quarter of the 2026 fiscal year, providing a tangible catalyst for the stock.

A Costly Return: The 25% Revenue Clause

The reopening of the Chinese market comes with a stringent condition that impacts profitability. Under terms set by the U.S. government, Nvidia must direct 25% of its revenue from these China sales to the U.S. Treasury. This substantial levy will pressure net margins. However, analysts view the arrangement as ultimately favorable for Nvidia, given that the alternative was a complete blockage of this multi-billion dollar segment. The agreement is currently limited to pre-vetted clients and will be closely monitored, with the capped volume serving as a preliminary test for future permissions.

Market Valuation and Analyst Consensus

As of late December 2025, Nvidia's stock was trading at a notable discount, approximately 13% below the level of the PHLX Semiconductor Index (SOX). Such a significant divergence from the sector benchmark is historically unusual for the company and may signal a potential undervaluation, especially considering its dominant market position.

The analyst community maintains a strongly bullish outlook. Out of 48 covering analysts, 44 have issued a "Strong Buy" recommendation for the shares. The consensus average price target stands at $256, with the highest projections reaching as high as $352 per share. For the 2027 fiscal year, market experts forecast earnings per share of $7.52, which would mark a 60% increase over the prior year.

Operational Readiness Ensures Swift Execution

Nvidia's supply chain was poised to react immediately upon regulatory approval, enabling the rapid fulfillment of upcoming orders. This operational preparedness allows the company to capitalize on the new export licenses without delay. The imminent revenue recognition is anticipated to serve as a positive driver for the equity once trading resumes after the New Year period, marking a pivotal turnaround for Nvidia's strategic position in a key geographic market.

Ad

Nvidia Stock: New Analysis - 01 January

Fresh Nvidia information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

Read our updated Nvidia analysis...