Nvidia shares came under pressure even before the market opened. The reason was the decision by Chinese customs authorities to effectively close the country to the latest H200 AI chips, despite the fact that just a few hours earlier, the Donald Trump administration had given conditional approval for their export.
This is a painful signal for Nvidia. We are talking about a market where the potential order volume is estimated at about $30 billion. Now these sales are in serious doubt.
China Imposes Unofficial Ban
According to sources, Chinese customs services received direct instructions not to let H200 chips cross the border. There has been no formal explanation for the decision yet, but the wording of the orders is essentially equivalent to a temporary ban.
At the same time, Chinese regulators held meetings with the country’s largest technology companies. They were strongly advised to refrain from purchasing H200 chips except in cases of “extreme necessity.” In practice, this means almost a complete freeze in demand.
Analysts do not rule out that Beijing’s move may be related to an attempt to stimulate the development of its own chips or as a negotiation tactic ahead of Donald Trump’s planned visit to China in April.
Why the H200 Is So Important
The H200 is Nvidia’s second most powerful AI processor. It is about six times more productive than the H20 model, which was restricted for China last year. The biggest market players were betting on the H200.
Alibaba, Tencent, and ByteDance managed to place orders for more than 2 million chips at a price of about $27,000 each. Together, this forms the same $30 billion in potential revenue.
At the same time, Nvidia had only about 700,000 chips in stock, so even without political restrictions, deliveries would have been stretched out over time. Nevertheless, a return to China was seen by the market as one of the key drivers of revenue growth in 2026.
Nvidia CEO Jensen Huang previously admitted that after restrictions on the H20, the company’s share of the Chinese market was effectively wiped out. The new measures only reinforce this status quo.
Market Reaction
In premarket trading on January 14, Nvidia shares fell to $184.63, losing about 0.6% compared to the previous day’s close. The day before, the stock closed higher, as investors initially reacted positively to news of export approval from the US side.
Despite the fresh risks, Wall Street remains optimistic. The consensus rating for the stock remains at “strong buy,” and the average target price is above $250, implying more than 40% upside potential.
The company’s financials remain strong. Revenue for the third quarter of fiscal 2026 exceeded $57 billion, and net profit was $31 billion. Nvidia’s market capitalization remains above $4.5 trillion, and its long-term performance is impressive: nearly 40% growth in a year and more than 12 times over the past five years.
The Main Risk Is Geopolitics
The story with the H200 shows that geopolitics continues to play a key role for Nvidia. Even with formal approval from the US, access to the Chinese market can be blocked in practice.
For investors, this means increased uncertainty. Nvidia’s business remains strong, but the future trajectory of the stock depends less and less on technology and earnings, and more on regulatory decisions in Washington and Beijing.
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