Wall Street analysts cheer as Nvidia set to resume sale of H20 chips to China

Wall Street analysts were positive after Nvidia (NASDAQ:NVDA) said it hopes to resume sales of its H20 chips to Chinese clients, citing U.S. government assurances that export licenses will be granted.

Wells Fargo said Nvidia resuming the sales of its H20 graphics processing units, or GPUs, into China is also a notable positive for Advanced Micro Devices (NASDAQ:AMD) and Micron Technology (NASDAQ:MU).

Nvidia CEO Jensen Huang also unveiled a new compliant chip, the RTX PRO, aimed at smart factories and logistics. The Nvidia head recently met with U.S. President Donald Trump to express support for U.S. job creation, onshoring, and AI leadership. He also met with Chinese officials to promote safe AI collaboration.

Wells Fargo analysts led by Aaron Rakers said that with the announced H20 ban in mid-April, Nvidia recorded a $4.5B charge in first quarter fiscal 2026 (versus an initial $5.5B guide). The U.S. tech giant was unable to ship about $2.5B in the first quarter fiscal 2026; shipped nearly $4.6B up until the ban, or implying around $7.1B in estimated non-impacted sales in the first quarter fiscal 2026, according to the analysts.

The analysts noted Nvidia had guided that it would lose roughly $8B in China sales in second quarter fiscal 2026, which reflected no planned replacement.

“We think investors could consider an annualized EPS impact in the $0.80-$1.10/sh. range — assuming a 73%-75% GM% [gross margin percentage] range,” the analysts added.

“In addition to being positive for NVDA, we think investors will consider this a notable positive for AMD (re: China MI308X ban),” said Rakers and his team.

The analysts added that AMD had reported that its second quarter 2025 revenue guidance reflected a nearly $700M impact from the China MI308X ban; guided about $1.5B for 2025 with the majority of the remainder (Wells Fargo estimate around $600M to $700M) to be recognized in the third quarter of 2025.

The analysts think investors could view this as a lateral positive for Micron (High Bandwidth Memory, or HBM, demand).

Evercore reiterated Nvidia as its Top Pick following the company’s announcement. The firm has an Outperform rating and a $190 price target on Nvidia’s stock.

Analysts led by Mark Lipacis said they see potentially $10B in near-term revenues for Nvidia following approval.

The analysts noted that when the H20 restrictions were originally announced, Nvidia took $5.5B in write-downs, 50% for purchase commitments, and 50% for product. “Assuming 70-75% GM [gross margin] on $2.75bn of inventories would imply about $10bn in revenues anticipated from those written down inventories on hand, but since the product was written down, that would suggest much higher gross margins on that $10bn of revenues,” said the analysts.

Lipacis and his team added that China is becoming less important as AI ramps up globally.

The analysts estimate that over the past five years, China has declined from 20%-25% of Nvidia’s revenues to 10%-15% more recently. Their analysis indicates that Tier 2 Cloud Service Providers are ramping up AI infrastructure buildouts globally, with Nvidia as the solution of choice. The analysts estimate Cloud capital expenditure, or CapEx, grows by over 50% in 2025, following 56% growth in 2026.

“Separately, our checks have indicated high demand for NVDA’s latest solution Blackwell,and high visibility for demand for Blackwells through 2025 and into 2026,” the analysts stated.

Lipacis and his team said their analysis of previous “Tectonic Shifts” in computing shows that typically one vertically integrated ecosystem captures 80% of the value created during each computing era, and that each computing era typically lasts 15 to 20 years and is 10 times the size of the previous era.

“We’ve argued that NVDA would be that player in the current computing era, and continueto estimate a bull-case 2030 EPS power of $13.30,” said the analysts.

Shares of Nvidia rose about 4% premarket on Tuesday.