Nvidia Stock Fell Nearly 5% On Monday After Huawei Mass Shipping AI Chips In China Report Surfaced, But Bernstein Analyst Says It Doesn't Matter: 'They Can't Compete Anyway'

On Monday, Nvidia Corporation NVDA dropped by 4.51% after a report revealed that Huawei Technologies is ramping up AI chip production, but a Bernstein analyst downplayed the significance, saying the AI chip giant “can’t compete” anyway in the Chinese market due to export restrictions.

What Happened: Bernstein analyst Stacy Rasgon told Yahoo Finance that Nvidia’s operations in China have been severely constrained due to U.S. export controls, which prevent the company from selling its top-tier AI chips like the A100 and H100. 

“I don’t see why it matters. Nvidia is not allowed to sell anything in China anymore,” he stated, adding, “They can’t compete anyway, they’re not allowed.”

Rasgon was referring to the White House’s imposition of an indefinite export ban on Nvidia's H20 chips to China, prompting the company to warn in a filing last week that it could take a potential $5.5 billion hit to its quarterly revenue.

See Also: Nvidia’s Jensen Huang Meets Japanese PM To Discuss AI’s Growing Energy Needs

“We’ve basically just handed the China AI market to Huawei anyway, so like I’m not surprised by any of this at all,” the analyst said.

"To be honest, we basically just handed the China AI market to Huawei anyway," Bernstein analyst @BernsteinRasgon says as $NVDA sinks. "From where we're standing now, I don't know that it matters. [Nvidia] can't compete anyway. They're not allowed." pic.twitter.com/hntudGrcOp

— Yahoo Finance (@YahooFinance) April 21, 2025

Why It’s Important: Huawei's decision to mass ship its advanced 910C AI chip to local customers next month was reported by Reuters on Monday.

The 910C chip from Huawei, designed to be more competitive with Nvidia's offerings, combines two previous Huawei chips into a single package, effectively doubling its performance.

This move positions Huawei to take advantage of Nvidia's absence in China's AI chip market, a situation exacerbated by the latest U.S. regulations requiring licenses for Nvidia's lower-tier chips as well.

Nvidia CEO Jensen Huang also undertook a high-level tour of China last week. In fiscal 2024, China contributed $17 billion in revenue, making up 13% of Nvidia's total sales.

Meanwhile, Chamath Palihapitiya, often referred to as the “SPAC King,” has expressed concerns about Nvidia, alleging that the company may not be prioritizing the best interests of the U.S.

Price Action: Nvidia’s stock has dropped 29.93% since the beginning of the year but is still up 21.87% over the last 12 months, according to Benzinga Pro data.

Benzinga Edge Stock Rankings assigns the company a robust growth score of 94.78%. Click here to see how it compares with other leading tech firms.

Photo Courtesy: Hepha1st0s on Shutterstock.com

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.