CNBC AI News – Nvidia shares surged over 3% in early trading on July 15th, fueled by optimism surrounding the potential resumption of H20 chip sales to China. The jump added nearly $200 billion to Nvidia’s market capitalization, a figure rivaling a significant portion of AMD’s total value. Nvidia’s market cap now comfortably sits above the $4 trillion mark.
AMD also benefited from the positive sentiment, with its stock price climbing more than 7% in early trading, bringing its market capitalization to approximately $250 billion.
The catalyst for the rally appears to be Nvidia CEO Jensen Huang’s recent visit to Beijing, where he stated that the company had secured assurances from the U.S. government and submitted licensing applications to restart H20 chip sales in the Chinese market. The H20 is a modified chip designed to comply with U.S. export regulations.
“China is a vital, vibrant market with a significant concentration of AI researchers,” Huang emphasized. “It is essential that U.S. companies have a presence in China.”
Previously, the H20 ban had reportedly cost Nvidia as much as $8 billion in lost revenue last quarter.
However, despite Nvidia’s optimism regarding H20 sales, market observers caution that uncertainties between the U.S. and China continue to loom large. The potential for shifting political winds could still impact the deal.
Moreover, Nvidia faces increasing competition from domestic Chinese players, most notably tech giant Huawei, and other chip manufacturers focused on AI inference applications. This competition could erode Nvidia’s market share in the long run.
He Hui, Research Director of Semiconductor Research at Omdia, told media outlets, “Chinese companies will continue to diversify their options to better ensure supply chain security, providing them with strategic flexibility.”
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