Nvidia Corporation's NVDA stock has dropped 17.34% year-to-date, but the company has now reportedly seen a reversal of planned export restrictions on its H20 artificial intelligence chips.
What Happened: The Donald Trump administration had been considering a ban on the export of Nvidia's H20 AI chips to China, which would have been the most advanced AI processors legally available to Chinese companies.
These restrictions had been in the works for months and were expected to be implemented soon. However, after Nvidia CEO Jensen Huang met with Trump at his Mar-a-Lago estate last week, the administration has reversed course, reported NPR, citing two sources with knowledge of the plan.
Nvidia also committed to increasing its U.S. investments in AI data centers, the report said.
Why It Matters: Previously, it was reported that Chinese tech giants Tencent Holdings TCEHY, Alibaba Group BABA, and ByteDance have ramped up their orders for Nvidia’s H20 AI chips, fueled by soaring demand for computing power driven by the rise of DeepSeek’s affordable AI models.
These companies have reportedly ordered more than $16 billion worth of Nvidia’s H20 server chips during the first quarter of 2025.
Last month, it was reported that Nvidia faced challenges due to chip shortages and sanctions disrupting supply. Chinese server maker H3C warned of a potential Nvidia H20 chip crisis, with inventories nearly depleted.
Chinese companies are actively seeking ways to lessen their dependence on Nvidia. In March, Qingcheng.AI unveiled "Chitu," a framework optimized for domestically produced chips.
Huawei Technologies has also made notable strides in developing its own AI chips, with Huang recognizing the company as a serious competitor.
Still, China continues to play a vital role in Nvidia’s business. In 2024, the company earned $12 billion from the Chinese market—doubling Huawei's sales of its Ascend 910B AI chips.
Price Action: Nvidia shares jumped 18.72% on Wednesday but dipped 1.53% in after-hours trading, reaching $112.59 at the time of writing, per Benzinga Pro data.
According to Benzinga Edge Stock Rankings, Nvidia (NVDA) holds a strong growth rating of 94.83%. You can view the full comparison with other companies by clicking here.
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