Nvidia’s $26.5B Volume Ranks Second Amid U.S.-China AI Chip Tug-of-War

Nvidia (NVDA) closed 0.60% higher on August 12, 2025, with a trading volume of $26.53 billion, ranking second in market activity. The stock’s performance reflects ongoing geopolitical and market dynamics surrounding its re-entry into the Chinese AI chip sector. The U.S. government approved the sale of modified H20 processors to China under the Trump administration, imposing a 15% revenue share on these transactions. However, Chinese regulators have issued directives discouraging the use of H20 chips, particularly for government and national security-related applications, citing alleged security risks such as potential backdoors. Major tech firms like ByteDance, Alibaba, and Tencent have been ordered to suspend H20 chip orders pending investigations into their security implications.

The U.S.-China regulatory tug-of-war highlights the strategic role of AI chips in global tech competition. While the Trump administration’s policy aims to balance economic interests with national security, Chinese authorities’ resistance underscores domestic efforts to promote local alternatives, such as Huawei’s offerings. Analysts note that the H20 processor, designed to comply with U.S. export restrictions, lags behind Nvidia’s prior-generation Hopper series in capabilities. Despite these challenges, BofA Securities reiterated a “buy” rating for Nvidia, emphasizing the resumption of China AI chip sales as a positive catalyst for the company’s growth trajectory.

The strategy of buying the top 500 stocks by daily trading volume and holding them for one day generated a moderate return of $2,340 over the period from 2022 to the present. The maximum drawdown recorded was -15.3% on October 27, 2022, illustrating the inherent risks of short-term trading strategies amid market volatility.