Nvidia Stock Rises. The Road to Sales in China Opens Up.

Nvidia chips are the preferred hardware for training artificial-intelligence models. (Marlena Sloss/Bloomberg)

Key Points

• Nvidia is nearing U.S. permission to export artificial-intelligence chips to China, with license applications under review by multiple departments.
• President Donald Trump stated he would allow shipments of Nvidia’s H200 chip to China, contingent on a 25% cut of sales for the U.S. government.
• Chinese authorities are discussing allowing only limited access to the H200 chips, according to previous reports.

Nvidia was gaining early on Friday. The chip maker looks to be nearing official U.S. permission to export artificial-intelligence chips to China.

Nvidia shares were up 3.2% at $179.70 in early trading. The stock rose 1.9% on Thursday but is down 1.4% over the past three months.

One thing weighing on the stock has been uncertainty over whether it will get access to the fast-growing Chinese AI processor market. Things look to be moving on that front, at least in Washington.

The Commerce Department has sent license applications for Nvidia chip sales for review by the State, Energy and Defense Departments, Reuters reported, citing people familiar with the matter.

The Commerce Department didn’t immediately respond to a request for comment early on Friday. President Donald Trump said earlier this month he would allow shipments of the company’s H200 chip to China, provided that Nvidia gives the U.S. government a 25% cut of sales.

The H200 isn’t as powerful as Nvidia’s current generation Blackwell AI chips. As Nvidia’s newer chips are increasingly made on more advanced manufacturing process nodes at Taiwan Semiconductor Manufacturing, there will be additional capacity to make H200s for China.

It remains to be seen whether Chinese authorities will allow Nvidia to sell the H200 in the country. Regulators in Beijing are discussing allowing only limited access to the chips, the Financial Times reported previously, citing people familiar with the matter.

Bernstein analyst Stacy Rasgon on Friday reaffirmed his Outperform rating and $275 price target for Nvidia shares. “Over the last 10 years there have only been THIRTEEN DAYS where NVDA’s stock traded cheaper relative to the SOX than it is trading now,” he wrote. “Investors buying Nvidia’s stock at current levels have historically done very well.”

The analyst said the chip maker now trades at a 13% discount on a forward price-to-earnings basis versus the semiconductor sector. He noted investors who had bought Nvidia at similar valuations over the last 10 years had average 1-year returns of more than 150%.

Among other chip makers, Advanced Micro Devices was up 4.4% and Broadcom was rising 2.8% in early trading. AMD is also awaiting permission to export chips to China.

Write to Adam Clark at adam.clark@barrons.com