Why Is Nvidia Stock Up Despite China Moving to Block H20 Chips

The Nvidia stock price is overcoming all odds and market volatility, inching higher to fresh all-time highs, above $182. A day before, the chipmaker agreed to share 15% of its revenue with the US government, on the H20 chip sales to China. However, earlier today, the Asian economic giant made a move, asking local firms to avoid using Nvidia’s H20 chips. Investors are confused about whether this stock rally will continue further or stall here.

Nvidia Stock Remains Firm Despite China’s Scare

Nvidia CEO Jensen Huang has effectively managed to navigate the Trump tariff war over the past month. This has helped the company’s stock price to continue its upward move, which has been one-directional. Since the lows of $94 in April, the Nvidia stock price has almost doubled, hitting all-time highs, as the company approaches $4.5 trillion market cap.

After Nvidia agreed to pay an additional 15% of its revenue as part of its H20 chip sales to China, the Asian economic giant has asked local companies to avoid using the Nvidia Chips. This is particularly for government-related purposes. This move from China could put stress to the revenue coming from Nvidia’s China operations.

Sources familiar with the matter told Bloomberg that Chinese authorities have issued notices to multiple firms advising against the use of less-advanced semiconductors. The guidance was particularly firm in discouraging the use of H20 chips for any government or national security-related projects by state-owned or private enterprises.

However, the letter did not mention having an outright ban on the H20 chips. Industry analysts widely agree that Chinese firms continue to seek out the chips, which remain effective for certain key AI applications. On Monday, President Donald Trump described the processor as “obsolete” but acknowledged that it “still has a market” in China.

On the news of China’s guidance, shares of local AI chip designer Cambricon Technologies Corp. surged by 20%. However, market experts believe that local Chinese firms might not be able to substitute for Nvidia chips. Homin Lee, a senior macro strategist at Lombard Odier in Singapore, said:

Why Does Nvidia Stock Continue To Rally Despite All Odds?

Despite agreeing to pay 15% revenue share to the US government, the Nvidia stock continued to tick higher. As the 15% additional charge to China chip sales applies to all semiconductor companies, analysts believe that Nvidia and AMD will consolidate even greater market share.

In a message on the X platform, The Kobeisse Letter noted: “New company-specific tariffs will make big companies even bigger. Small caps and small businesses will hurt”.

AMD To Gain Greater Market Share Over Nvidia

With the race being two dominant AI chip makers intensifying, analysts believe that Advanced Micro Devices (AMD) could gain market share against Nvidia moving ahead.

Currently, the dominant AI infrastructure player, Nvidia built its lead through a first-mover advantage. However, AMD offers superior technology for certain applications, focusing on memory capacity, cost efficiency, and performance. This makes it well-suited for more demanding AI workloads and inference tasks.

With the latest acquisition of ZT Systems and the development of the Helios system, AMD has further expanded its AI capabilities. ZT Systems designs and deploys AMD-based rack-scale solutions for data centers, and its integration enables AMD to deliver a fully in-house, end-to-end offering. The Helios platform combines the upcoming MI400 series with EPYC CPUs in a unified architecture optimized for AI workloads.