Nvidia Faces Supply Constraints in China Amid High Demand for H20 GPUs

Nvidia faces supply challenges in China due to high demand for H20 GPUs. Analysts predict a 6.19% upside based on current targets, while GuruFocus estimates indicate a 62.58% potential upside in the stock's GF Value. Despite production constraints, Nvidia's sales prospects remain strong, driven by robust demand from major Chinese players.

Nvidia Corporation (NVDA) has secured export licenses to resume sales of its H20 GPUs to China, marking a significant development in the global semiconductor industry. The company has been working with the U.S. government to obtain the necessary approvals, which were previously restricted due to national security concerns.

The resumption of sales is expected to boost Nvidia's revenue and market share in China. Analysts predict that Nvidia could make up to $15 billion in revenue from China in the second half of 2025 alone [1]. This represents a substantial increase from the company's 2025 sales of approximately $17 billion from the region [1].

The news has driven Nvidia's stock price higher, with the company's shares reaching a new intraday high of $172.26 on July 2, 2025. This represents a 4.99% increase from the opening price and has lifted most chip stocks due to the company's success in the gaming and AI sectors [2]. Analysts predict an average price target of $178.32, implying an 8.12% upside from the current market price [2]. GuruFocus estimates indicate a 62.58% potential upside in the stock's GF Value over the next year [2].

Despite supply challenges in China due to high demand for H20 GPUs, Nvidia's sales prospects remain strong. The company has introduced a new model, the RTX Pro GPU, tailored to meet regulatory rules in the Chinese market [1]. This move demonstrates Nvidia's commitment to addressing the unique demands of the Chinese market and capitalizing on the growing AI and gaming sectors.

Nvidia's success in resuming sales to China is part of a broader thawing of relations between the U.S. and China, with both sides approving exports of crucial technologies [1]. This shift in U.S. export policies underscores the ongoing geopolitical dynamics shaping the global semiconductor industry.

References:
[1] https://www.ainvest.com/news/nvidia-seeks-export-licenses-china-resumes-h20-gpu-shipments-2507-53/
[2] https://www.ainvest.com/news/nvidia-stock-hits-intraday-high-boosts-chip-stocks-2507/