U.S. Grants Conditional Approval for Nvidia’s Advanced Chip Exports to China

In a surprising weekend decision, U.S. regulators have approved the sale of Nvidia's high-performance H200 chip to the Chinese market, but attached a significant financial condition. For each unit sold, the semiconductor giant must remit 25% of the revenue directly to the U.S. Treasury. This development arrives as Nvidia's stock faces broader market pressure, having closed at $175.02 on Friday, marking a single-day decline of 3.27%.

The policy reversal by the Trump administration appears driven by a strategic calculus: allowing Nvidia to maintain a foothold in the critical Chinese market while domestic competitors like Huawei gain ground with comparable systems. The authorization specifically covers the H200, a processor noted for significantly faster performance than its predecessor, the H100.

According to reports from Reuters and Bloomberg, demand from Chinese corporations is substantial. Major technology firms, including Alibaba and ByteDance, have expressed strong interest in acquiring these high-performance GPUs. Nvidia is currently evaluating whether it can ramp up production to meet this potential demand without disrupting supplies to its existing customers in the U.S. and Europe.

Key Details of the Arrangement:
* H200 sales to China are restricted to pre-approved customers only.
* A mandatory 25% levy per sale is imposed, payable to the U.S. Treasury.
* Nvidia maintains a technological lead over current Chinese chips, estimated at approximately 18 months.
* Final import approval from Chinese authorities in Beijing is still pending.

In a related enforcement action, the U.S. Department of Justice announced the seizure of $50 million in assets on Saturday. The Texas-based firm Hao Global LLC is alleged to have smuggled illegal shipments of H100 and H200 chips worth $160 million to China between October 2024 and May 2025.

Should investors sell immediately? Or is it worth buying Nvidia?

Stock Correction Contrasts Strong Business Performance

The news of conditional export approval comes during an ongoing pullback in Nvidia's share price. Since its peak in late October, the equity has shed roughly 14% of its value, with a weekly loss of about 5% reflecting a broader market rotation away from mega-cap technology stocks toward smaller companies and dividend payers.

This weakness is not mirrored in the company's fundamental business results. For the third quarter of its fiscal 2026, Nvidia reported revenue of $57 billion, a 62% year-over-year increase, alongside a net profit margin of 56%. However, valuation remains elevated, with a price-to-earnings ratio of 46 significantly exceeding the S&P 500 average of 31.

Further uncertainty stems from China's own industrial policy. While Chinese companies are eager buyers, the government in Beijing is actively promoting its domestic semiconductor industry with a subsidy package worth up to $70 billion. A final green light from Chinese regulators for H200 imports has yet to be issued.

Market Outlook and Technical Analysis

Despite recent volatility, analysts maintain a positive long-term view. Firms like Evercore ISI have price targets as high as $352, with the consensus estimate hovering around $250. From a technical perspective, the stock is trading in a critical zone. The $170 support level must hold to prevent further declines, while a sustained breakout above $185 is needed to signal an end to the recent downtrend. The immediate market reaction is likely to be heavily influenced by Beijing's official response to the U.S. authorization.