NVDA update 2025-12-09

Date: 2025-12-09 Event Type: News

Executive Summary

Nvidia receives approval to export its H200 chips to select customers in China, with a portion of revenue directed to the U.S. government. Analyst price targets are being revised upwards in response. However, uncertainties remain regarding whether Chinese companies will actually be permitted by Beijing to purchase these chips.

Key Takeaways

Point 1: Nvidia will be allowed to sell H200 chips to China, a reversal of previous restrictions. This opens a significant potential revenue stream for NVDA.
Point 2: 25% of the revenue generated from H200 chip sales to China will go to the U.S. government. This likely implies certain conditions and government oversight associated with these sales.
Point 3: Analysts are increasing their price targets for Nvidia following the news, signaling positive sentiment and anticipated financial gains.
Point 4: The ultimate decision on whether Chinese companies can purchase the H200 chips lies with Beijing, introducing regulatory uncertainty.

Thesis Impact

Status: Strengthened
Reasoning: The approval to export H200 chips to China addresses a key overhang for Nvidia. Previously, restrictions on sales to China were a major headwind. While some revenue sharing is required, access to the Chinese market, even with limitations, significantly strengthens the growth narrative. The news implies that the US government views NVIDIA as critical to maintaining chip leadership. However, the reliance on Chinese government approval creates a risk and caps the potential upside.

Valuation Update

Previous Fair Value: $1,200
New Fair Value: $1,350
Current Price: (Assuming current price is reflected in pre-market trading increase following the news, but needs to be updated with actual real-time price) $1,250

Action Plan

Decision: Buy
Rationale: While the price has likely already seen a bump from the pre-market activity, the long-term implications of re-entering the Chinese market, even with restrictions, suggest further upside potential. The analyst price target revisions further support a bullish outlook. The fundamental growth story for NVDA remains strong, driven by AI demand. The lingering regulatory risk from China warrants careful monitoring but does not negate the overall positive impact. Accumulate shares on dips.

Executive Summary

Key Takeaways

Point 1: Nvidia will be allowed to sell H200 chips to China, a reversal of previous restrictions. This opens a significant potential revenue stream for NVDA.

Point 2: 25% of the revenue generated from H200 chip sales to China will go to the U.S. government. This likely implies certain conditions and government oversight associated with these sales.

Point 3: Analysts are increasing their price targets for Nvidia following the news, signaling positive sentiment and anticipated financial gains.

Point 4: The ultimate decision on whether Chinese companies can purchase the H200 chips lies with Beijing, introducing regulatory uncertainty.

Thesis Impact

Status: Strengthened

Reasoning: The approval to export H200 chips to China addresses a key overhang for Nvidia. Previously, restrictions on sales to China were a major headwind. While some revenue sharing is required, access to the Chinese market, even with limitations, significantly strengthens the growth narrative. The news implies that the US government views NVIDIA as critical to maintaining chip leadership. However, the reliance on Chinese government approval creates a risk and caps the potential upside.

Action Plan

Decision: Buy

Rationale: While the price has likely already seen a bump from the pre-market activity, the long-term implications of re-entering the Chinese market, even with restrictions, suggest further upside potential. The analyst price target revisions further support a bullish outlook. The fundamental growth story for NVDA remains strong, driven by AI demand. The lingering regulatory risk from China warrants careful monitoring but does not negate the overall positive impact. Accumulate shares on dips.