Key Points
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Nvidia has delivered record earnings in recent years as demand for its AI chips skyrocketed.
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But recent exclusion from one major market has kept the tech giant from reaching its full potential.
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Nvidia (NASDAQ: NVDA) delivered top-notch performance over the past two years, with the stock climbing more than 200% over that time period. This is thanks to the company’s position in the artificial intelligence (AI) market, one that’s on the road to reach into the trillions of dollars in just a few years. Nvidia’s dominance in AI chips and related products and services has helped the company’s earnings soar to records.
But one problem weighed on Nvidia throughout most of 2025, and that was sales of chips to China. The U.S. had tightened export controls on chips to that country, and as a result, Nvidia reported a billion-dollar charge earlier in the year for chips that it couldn’t sell. Nvidia chief Jensen Huang says China’s AI chip market could represent hundreds of billions of dollars by the end of the decade, so this clearly is a market that chip companies want to access.
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A few weeks ago, President Donald Trump gave Nvidia the OK for sales of its H200 chip to China — and just recently, Nvidia made a related move that could be big for 2026. Let’s check it out and determine if now is a good moment to get in on the stock.
Image source: Getty Images.
Export controls on AI chips
So, first, a bit more background on the Nvidia-China situation. The U.S. initially placed controls on exports to that country and certain others for security reasons back in 2022. In response to that, Nvidia designed the H20 chip to specifically meet guidelines and was able to sell that product in China. In the fiscal 2025 full year, sales to China represented 13% of Nvidia’s overall revenue.
But last year, as mentioned, the U.S. halted sales of even the H20, leaving Nvidia and other U.S. chip designers excluded from the Chinese market.
Meanwhile, Nvidia continued to deliver solid growth, suggesting that even without sales to China, the company could score an AI win for investors. In the latest quarter, for example, Nvidia’s revenue soared 62% to $57 billion amid solid demand for its Blackwell platform. And Nvidia continued to generate strong profitability on sales, maintaining gross margin above 70%. Still, the picture likely would have been even brighter if Nvidia had been able to serve customers in China.
Trump’s big announcement
Several weeks ago, Trump announced that Nvidia may return to the China market — this time with the H200, which is more powerful than the H20 but less powerful than Nvidia’s Blackwell chips. As part of the deal, Nvidia must offer 25% of its China chip sales to the U.S.
Now, let’s consider the move that Nvidia reportedly made recently. Nvidia said it aims to begin shipping H200 chips to China, using existing stock, by the middle of next month, Reuters reported, citing sources familiar with the situation. Nvidia also has asked Taiwan Semiconductor Manufacturing, the producer of its chips, to increase production amid orders for two million H200s for 2026, according to the wire service.
This is fantastic news, but some elements of risk remain. China hasn’t yet officially approved the entrance of H200s into the country — any delay or setback there could be problematic, especially if Nvidia starts ramping up production. Nvidia also faces the complex task of continuing strong production to meet demand for its newer Blackwell platform in the U.S. and other parts of the world, and at the same time producing enough H200s for Chinese customers.
Reason to be optimistic
Still, when Trump announced the loosening of export controls, he also said that China’s response was positive — so there’s reason to be optimistic about Nvidia’s return to that market. As for production, Nvidia has a track record of successful product launches while managing the manufacturing of earlier systems, too. And it’s unlikely Nvidia would make a significant move to ramp up H200 production without confidence that its orders could be shipped.
So, does this potential business in China make Nvidia a buy today? I wouldn’t buy Nvidia uniquely for this reason, but renewed sales in China clearly would be a great step forward in 2026. The reason I would buy the stock is the company’s overall potential in the global AI market. Nvidia is the AI chip leader, and this is likely to continue due to its focus on innovation and its financial strength. Finally, demand from AI customers remains strong.
These three elements make Nvidia a fantastic buy — and a potential return to the China market in 2026 is icing on the cake.
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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
