NVIDIA's Rebound: How U.S. Policy Shifts Clear the Path to $15B+ in Chinese Market Recovery

The U.S. government’s abrupt reversal of its stringent AI chip export restrictions to China has created a seismic shift in the global semiconductor market—one that NVIDIA (NASDAQ: NVDA) is uniquely positioned to capitalize on. With the Trump administration scrapping Biden-era rules that had cost NVIDIA billions in lost revenue and eroded its dominance in China, the stage is set for a dramatic market recovery. This policy pivot, coupled with NVIDIA’s technological edge and the bullish technicals highlighted by Loop Capital, presents a once-in-a-decade opportunity to secure exposure to the AI revolution before it’s too late.

The Geopolitical Pivot: From Policy Failure to Market Reopening

The Biden administration’s 2025 AI Diffusion Rule, designed to curb China’s access to advanced AI chips, backfired spectacularly. NVIDIA’s China market share plummeted from 95% to 50%, forcing the company to write off $5.5 billion in unsellable H20 chips. CEO Jensen Huang called the policy a “failure,” arguing it accelerated China’s development of domestic alternatives like Huawei’s Ascend 910C and 910D chips. By rescinding these restrictions, the Trump administration has removed a self-inflicted wound, allowing NVIDIA to reclaim its position in a Chinese AI chip market projected to hit $50 billion by 2026.

The reversal is not merely a reprieve—it’s a strategic reset. U.S. sanctions had inadvertently fueled China’s $150 billion chip investment drive, propelling companies like Huawei to leapfrog performance benchmarks. Now, with access restored, NVIDIA can leverage its CUDA software ecosystem, unmatched in global AI development, to counter domestic rivals. This is a race where software stack superiority often trumps hardware specs, and NVIDIA holds a decisive lead.

The immediate market reaction to the policy shift—NVIDIA’s stock rebounding from a 20% year-to-date low—hints at the upside now unlocked. Investors are already pricing in the recovery.

Loop Capital’s $175 Target: Technical Bullishness Meets Market Reality

Loop Capital’s Buy rating and $175 price target for NVIDIA are not arbitrary. The firm’s analysis hinges on three pillars:
1. GPU Demand Surge: NVIDIA is on track to ship over 8 million GPUs by 2026, with Blackwell architecture-driven ASPs soaring to $33,000—up 27% from 2025.
2. Market Share Recovery: The China reopening alone could unlock $15 billion in lost revenue, with domestic competitors like Huawei still trailing in software integration and scalability.
3. Pipeline Momentum: Untapped orders from Middle Eastern buyers and Elon Musk’s xAI data center (projected to add 1 million GPUs) are catalysts that Wall Street has yet to fully price in.

Even Loop’s conservative fiscal 2026 estimates—$229.7 billion in revenue and $5.00 per share in earnings—exceed consensus by double digits. GuruFocus’s $265 GF Value estimate underscores the potential upside, suggesting a 98% premium to current prices. This is not just a recovery—it’s a growth reacceleration.

The Risks? China’s Progress—and Why NVIDIA Still Wins

China’s AI chip ambitions are real. Huawei’s 910C outperforms NVIDIA’s H20 in raw compute, and its 920 series looms. But this is not a zero-sum game. NVIDIA’s CUDA ecosystem—used by 90% of AI developers—creates switching costs that even state-backed rivals struggle to overcome. Meanwhile, U.S.-China tensions remain fluid; if Beijing retaliates with tariffs or sanctions, NVIDIA’s Foxconn partnership in Houston (to build AI servers) provides a hedge.

The bigger risk is missing this inflection point. NVIDIA’s valuation is still discounted relative to its AI-driven moat. With Blackwell shipments ramping in Q3 and earnings on May 28 to validate demand, now is the moment to act.

Conclusion: Act Now—or Miss the AI Decade

The geopolitical pendulum has swung back in NVIDIA’s favor. A policy reversal that was once a $15 billion albatross is now a springboard to reclaim dominance in the world’s fastest-growing AI market. With Loop Capital’s $175 target achievable within months—and a GF Value suggesting even higher rewards—the path is clear.

The question is no longer if NVIDIA will recover, but how much upside investors will capture. The window to position before the next earnings report and Blackwell’s full rollout is narrowing fast. For investors serious about owning the future of AI, this is the buy signal.

Act now—before China’s AI rivals close the gap for good.