Nvidia Stock Investors Just Got Good (and Very Bad) News From President Donald Trump

Nvidia (NASDAQ: NVDA) dominates the market for accelerated computing infrastructure. Particularly important, its graphics processing units (GPUs) and networking equipment are the industry standard in running artificial intelligence workloads, and many analysts believe its sticky software platform (CUDA) will keep the company in a leadership position for years to come.

However, Nvidia's market share in China has essentially dropped to zero due to U.S. export restrictions. On that front, Nvidia shareholders recently got some good (and very bad) news from President Donald Trump. Here are the important details.

Image source: Official White House photo.

Nvidia has lost substantial market share in China due to export restrictions

Semiconductor company Nvidia earned 26% of its revenue from China during the fiscal year ending in January 2022. Export restrictions imposed by the U.S. government have since dragged that figure down to 11% in the first three quarters of fiscal 2026. The timeline below provides a brief overview of how U.S. policy has evolved over time.

• September 2022: The Biden administration told Nvidia to stop exporting A100 GPUs and the more powerful H100 GPUs to China. The company estimated it would lose about $400 million in quarterly revenue. Nvidia responded by creating a compliant version of its Hopper GPU called the H800.
• October 2023: The Biden administration told Nvidia to stop exporting H800 GPUs to China. The company was forced to cancel billions of dollars in orders. Nvidia again responded by creating an export-compliant version of its Hopper GPU called the H20.
• April 2025: The Trump administration told Nvidia to stop exporting H20 GPUs to China. The company took a $4.5 billion charge due to inventory that could not be sold or repurposed, and it estimated it would lose $8 billion in revenue in the second quarter.
• August 2025: The Trump administration reversed course and said it would let Nvidia sell its H20 GPUs in China in exchange for 15% of revenue. However, the Chinese government told companies not to buy them after U.S. Commerce Secretary Howard Lutnick made insulting comments during a CNBC interview.

In October, Nvidia CEO Jensen Huang provided an update on its China business. "We went from 95% market share to 0%, and so I can't imagine that any policymaker thinking that's a good idea, that whatever policy we implemented caused America to lose one of the largest markets in the world."

Nvidia stock investors just got good (and very bad) news from President Trump

In December, President Trump gave approval for Nvidia to sell H200 GPUs in China. While not as powerful as chips built on Blackwell architecture, the H200 is the fastest chip built on Hopper architecture, making it one of the most powerful GPUs on the market. Indeed, the H200 is about six times more powerful than the H20.

That is good news for Nvidia and its shareholders. Provided the Chinese government does not warn domestic companies away from H200 GPUs, Nvidia has an opportunity to regain lost revenue share in China, which is the second-largest artificial intelligence market in the world. President Trump said Chinese President Xi Jinping "responded positively" to the news.

However, Nvidia shareholders also got some very bad news. President Trump said the U.S. government will take 25% of revenue earned on H200 sales in China, higher than the 15% proposed in August. That sets a dangerous precedent. The president has effectively put an export tax on Nvidia GPUs, and export taxes are prohibited by the U.S. Constitution.

Nvidia is in a difficult position. The chipmaker is unlikely to challenge the terms in court for fear of retaliation. At the very least, Trump would retract his blessing to sell H200 GPUs in China, though it's not hard to imagine the president lashing out on social media as he has done with Amazon and Apple in the past year.

So, Nvidia must either accept what is essentially an illegal export tax, or miss out on the Chinese AI market. The situation is particularly alarming because nothing stops the Trump administration from raising its fee in the future. Indeed, the president has already raised the fee 10 percentage points since August. Will it be 50% in another year? In that scenario, Nvidia would face the same choice: capitulate or abandon the Chinese market.

Here is the bottom line: I think Nvidia stock is still a must-own for patient investors who hope to benefit from the artificial intelligence revolution. However, shareholders should be aware that the H200 deal with the Trump administration is both good and bad news, and the terms could get worse over time.

Trevor Jennewine has positions in Amazon and Nvidia. The Motley Fool has positions in and recommends Amazon, Apple, and Nvidia. The Motley Fool has a disclosure policy.