Nvidia on the Cusp of a Massive Rebound as China Export Restrictions Lifted

Nvidia has received approval from the US government to apply for an export license for H20 chips, which could boost its revenue growth rate by 77% to $45 billion. The loss of H20 chips caused a $2.5 billion dent in Nvidia's financials, but the return of H20 sales could offset this loss and sustain Nvidia's growth level. The stock is valued at 38 times forward earnings, but investors may see it skyrocket off of this news.

Nvidia (NVDA) has received a significant boost with the U.S. government's approval to apply for an export license for its H20 chips, which could substantially enhance the company's revenue growth. This development comes after the U.S. government had previously revoked Nvidia's export license for H20 chips, leading to a $2.5 billion loss in sales during the first quarter of 2026. The resumption of H20 chip sales to China could offset this loss and contribute to Nvidia's continued growth.

Needham's analyst N. Quinn Bolton raised Nvidia's price forecast to $200, citing $3 billion in quarterly H20 sales after the U.S. export license approval [1]. Bolton projects that the return of H20 sales could lift Nvidia's 2028 revenue forecast to $315 billion, with an EPS of $7.25. This positive outlook is driven by the anticipated launch of Blackwell GPU variants tailored for the Chinese market, such as the B30 and B40/RTX 6000D, which are in high demand with over $1 billion in orders already placed [1].

The U.S. government's assurance that licenses will be granted comes after Nvidia's CEO Jensen Huang met with U.S. President Donald Trump and discussed the company's operations in China [2]. Huang noted that half of the world's AI researchers are in China, making it crucial for American companies to compete and serve the market there [2].

Nvidia's stock is currently trading at $170.02, a decrease of 0.40% from its last check on Wednesday. However, investors may see the stock skyrocket due to the anticipated boost in revenue from the resumption of H20 chip sales. The company's Q2 ends in late July, so there won't be any H20 sales this quarter. However, pent-up demand could surface in Q3, potentially causing its growth to reaccelerate [3].

Nvidia's stock is valued at 38 times forward earnings, but the recent news could lead to a significant increase in its valuation. The company's ability to recapture lost sales and gain further traction in China, even under export restrictions, is a testament to its rapid product adaptation and sustained demand from Chinese tech firms [1].

References:
[1] https://www.benzinga.com/analyst-stock-ratings/reiteration/25/07/46453723/why-nvidias-china-comeback-could-propel-its-stock-to-new-heights
[2] https://apnews.com/article/nvidia-china-ai-chips-h20-trump-91588c36559bc881b8e010a9ed95cf0a
[3] https://www.nasdaq.com/articles/nvidia-just-got-incredible-news-about-china-could-cause-stock-skyrocket