What Happens to Nvidia Stock Next As Company Stops H20 Chips Sales to China?

Key Insights:

• Despite the correction, at least nine analysts have raised Nvidia’s 12-month price targets for the Nvidia stock this week.
• These companies set an average target of $194 and some upgrades as high as $240, citing strong AI-driven growth and limited impact from China.
• Nvidia suspended H20 chip production after Chinese authorities flagged potential security “backdoors.”

Nvidia stock price faces further selling pressure, correcting an additional 2% in the after-hours on Thursday, and falling to $172. This is because the company CEO, Jensen Huang, announced plans to halt the production of H20 chips. The development comes as the Chinese government has asked its technology firms to stop purchasing the chips amid the Trump tariff war.

What Happens to Nvidia Stock Next?

After hitting an all-time high at $184 in mid-August, the Nvidia stock has corrected by 5% and is currently flirting with $172. This is the biggest decline in the stock price since the April lows of $94. Since then, the stock has rallied in one direction until entering a correction last week.

All eyes are currently on the Nvidia Q2 earnings scheduled next week on August 27. The latest Bloomberg report states that, despite the macro uncertainty, analysts have raised the target for NVDA stock.

At least nine analysts have raised their 12-month price targets for the company this week, boosting the average target by 3% to roughly $194. This hints at more than 10% upside since the Thursday closing. Speaking to Bloomberg, Brian Mulberry, client portfolio manager at Zacks Investment Management, said:

Some top financial firms upgrading their stock prices include Cantor Fitzgerald, KeyBanc, Wedbush, Morgan Stanley, UBS, and Susquehanna. These firms are confident of a stock rally despite uncertainties around the China chip sales. In a note to client, while increasing the Nvidia stock target to $240 from $200, analysts at Cantor Fitzgerald stated:

Nvidia Stock Dominates Wall Street

In this mega rally, Nvidia’s stock weightage in the S&P 500 index has grown rapidly. As a result, the technology firm remains among investors’ favourites. The earnings season has so far indicated a favorable outlook for the chipmaker’s quarterly results.

Furthermore, Magnificent 7 giants like Meta Platforms Inc., Microsoft Corp., Alphabet Inc., and Amazon have ramped up commitments for billions of dollars in capital spending.

Nvidia’s market size is humongous, and is greater than the GDPs of top global economies like Japan, India, UK, France, and Italy. Nvidia’s market capitalization has surged to a level equivalent to 3.6% of global GDP, underscoring the scale of the AI-driven rally.

Nvidia Stops Production of the H20 Chip, Popular In China

Nvidia has instructed some of its component suppliers to halt production of its H20 graphics processing units designed for China, amid an escalating crackdown by Beijing. This move comes after recent directives from Chinese authorities who urged local firms to stop the chip purchase, citing security concerns.

Suppliers impacted include Arizona-based Amkor Technology, which manages advanced packaging for H20 chips. Other players include South Korea’s Samsung Electronics, which provides memory components.

Following a previous shipment ban in April, the development casts further uncertainty on the H20’s return to the Chinese market, even after Washington signaled plans to grant export licenses for the chips.

Chinese officials reportedly fear the chips may contain tracking features or “backdoors” that allow remote operation. In May, U.S. lawmakers introduced the bipartisan Chip Security Act, aiming to mandate security safeguards and location verification in advanced AI chips from companies such as Nvidia.

While addressing the press in Taiwan on Friday, company CEO Jensen Huang confirmed that Chinese authorities have raised concerns about potential security “backdoors.” He added: