Nvidia (NVDA) Stock Gains 2.3% as U.S. Approves H200 Chip Sales to China — Wolfe Maintains Top Pick Status

TLDR

• Nvidia shares climbed approximately 2.3% following news that U.S. authorities approved around 10 Chinese tech companies to acquire H200 chips, with Alibaba, Tencent, ByteDance, and JD.com among them
• Companies granted approval may acquire as many as 75,000 H200 chips each, purchasing directly from Nvidia or via authorized distributors like Lenovo and Foxconn
• Jensen Huang, Nvidia’s CEO, accompanied a White House delegation to Beijing following a direct invitation from President Trump — his name was added to the roster after initial planning
• Transactions remain pending; Chinese companies have held off on submitting orders after receiving direction from Beijing officials
• Wolfe Research maintained Nvidia as its preferred AI chip selection, describing it as “our best idea” even after six weeks of relative underperformance

Nvidia (NVDA) shares advanced roughly 2.3% on Wednesday following a Reuters report indicating U.S. officials have authorized approximately 10 Chinese enterprises to acquire the H200 chip — Nvidia’s second-strongest AI processor currently permitted for export.

NVIDIA Corporation, NVDA

The stock traded near $225.83, reflecting a $5.05 increase for the session.

Companies receiving authorization include Alibaba, Tencent, ByteDance, and JD.com. Distribution partners Lenovo and Foxconn were also granted clearance. Each approved entity may acquire up to 75,000 units, sourcing them either straight from Nvidia or via authorized distribution channels.

CEO Jensen Huang made the trip to Beijing alongside a U.S. trade delegation. His inclusion came after the initial roster was finalized, following a personal invitation from President Trump, who allegedly brought him aboard during a stopover in Alaska before heading to discussions with Chinese President Xi Jinping.

The diplomatic mission is broadly interpreted as an attempt to revive Nvidia’s dormant Chinese market operations.

No Deals Signed Yet

Despite receiving authorization, no transactions have been finalized. Chinese enterprises have refrained from submitting purchase orders after receiving instructions from Beijing. Reports indicate mounting pressure within China to either reject or thoroughly scrutinize potential acquisitions.

The ongoing uncertainty places Nvidia in limbo — possessing the necessary clearances but unable to ship products.

Prior to stricter U.S. export controls, Nvidia commanded approximately 95% of China’s premium chip sector. China previously represented 13% of Nvidia’s overall revenue. Huang has projected China’s AI sector could reach $50 billion in value this year.

Chinese technology stocks responded positively to the announcement. Alibaba increased 8.18%, JD.com surged 7.24%, and Tencent advanced 4.80%.

Wolfe Keeps Nvidia as Top AI Chip Pick

In a separate development, Wolfe Research reaffirmed its optimistic outlook on Nvidia ahead of the earnings reporting period, maintaining an Outperform rating and designating it the firm’s preferred selection among AI chip manufacturers.

Analyst Chris Caso indicated that worries surrounding cloud infrastructure capital expenditure that pressured AI compute stocks earlier in the year have mostly dissipated, with hyperscaler investment projections continuing their upward trajectory.

Wolfe stated that “hyperscalers simply have no choice but to spend,” highlighting agentic AI as a technological evolution that leading cloud platforms cannot afford to overlook.

Nvidia has trailed AI compute competitors during the previous six-week period despite recording approximately 28% gains, with Broadcom, Marvell, and AMD delivering stronger performance throughout that timeframe.

Wolfe attributed the relative weakness primarily to limited visibility into 2027 revenue projections. Rival companies have provided more definitive forward-looking guidance, offering investors greater clarity.

The firm observed that Nvidia’s $1 trillion disclosure during its GTC conference failed to encompass all potential opportunities, including unbooked future business and revenue contributions from the Rubin pod architecture. Wolfe suggested more transparent 2027 guidance could enable Nvidia to narrow the performance differential with competitors.

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