TLDR
- Nvidia stock is up 0.5% in after-hours trading but down about 1% over the past three months as investors wait for clarity on chip sales
- CEO Jensen Huang confirms Nvidia is seeing “very high” demand in China for H200 chips and production has resumed
- Nvidia already has orders for over 2 million H200 chips valued at approximately $54 billion
- The U.S. government recently signaled approval for H200 exports to China with a 25% payment requirement to the government
- Elon Musk’s xAI completed a $20 billion funding round and plans to expand its data center to include one million Nvidia GPUs
Nvidia shares are treading water while the broader AI trade heats up. The stock gained 0.5% in after-hours trading Tuesday but remains down roughly 1% over three months.
Investors aren’t losing faith in AI. They’re just waiting for concrete news. Specifically, they want confirmation that Nvidia can actually ship its H200 chips to China or land major new orders from U.S. companies.
The memory chip sector is booming right now. Companies like Sandisk jumped over 27%. But Nvidia shareholders have already priced in the success of the latest Vera Rubin hardware for domestic markets.
The real question mark hangs over China. Will Beijing allow its tech companies to buy Nvidia’s chips in bulk?
CEO Jensen Huang addressed the issue Tuesday at CES in Las Vegas. He told reporters the company has restarted H200 production. “We’ve fired up our supply chain, and H200s are flowing through the line,” Huang said.
The final licensing details with the U.S. government are still being worked out. But Huang sounds confident they’ll get sorted soon.
The $54 Billion Opportunity
The numbers behind the China market are huge. Nvidia already has orders for more than 2 million H200 chips at $27,000 per unit. That’s roughly $54 billion in potential revenue.
Reuters previously reported these orders exist. The catch is whether Chinese buyers will actually be allowed to complete those purchases.
In December, President Donald Trump said Nvidia could export the H200 to China. There’s one condition though. The company must pay 25% of those sales to the U.S. government.
The H200 isn’t Nvidia’s newest model. It’s a generation or two behind the cutting edge. But unlike previous China-approved chips, this one hasn’t been deliberately slowed down to meet export restrictions.
Waiting on Purchase Orders
Huang doesn’t expect Beijing to make a formal announcement about approving imports. Instead, he says Nvidia will learn the regulatory status as purchase orders start coming in.
“We’re not expecting any press releases, or any large declarations,” Huang explained. “It’s just going to be purchase orders.”
Huang previously estimated the Chinese market could be worth $50 billion annually. None of that revenue is currently baked into Nvidia’s forecasts.
Any H200 sales to China would come on top of the $500 billion two-year forecast the company provided last year. “It appears that we’re going to be going back to China,” Huang said.
Musk’s xAI just wrapped up a $20 billion Series E funding round. That exceeded the original $15 billion target. The company operates a data center near Memphis with over 200,000 Nvidia chips powering the Grok AI chatbot.
The facility plans to eventually house at least one million graphics processing units. That’s another massive order book for Nvidia if the expansion moves forward as planned.
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