Nvidia Stock Investors Just Got Great News From the Trump Administration

Key Points

• In April, the Trump administration blocked Nvidia from selling H20 GPUs in China, a decision that has already cost the company billions of dollars in revenue.

• Nvidia recently filed applications to resume selling H20 GPUs in China and has reportedly received assurances from the U.S. government that licenses will be granted.

• Wall Street analysts are likely to raise their earnings forecasts for Nvidia, and upward revisions to earnings forecasts tend to drive share-price appreciation.

• 10 stocks we like better than Nvidia ›

Nvidia (NASDAQ: NVDA) has been a cornerstone of the artificial intelligence (AI) boom. The stock has advanced 1,070% since January 2023 as the company has reported tremendous financial results, driven by strong demand for its graphics processing units (GPUs) and other data center infrastructure.

Nevertheless, export restrictions imposed by the U.S. government have cost the company billions of dollars in sales. Fortunately, Nvidia shareholders recently got great news from the Trump administration: Applications to resume selling its H20 GPUs in China will be approved by the Commerce Department.

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Here's what investors should know.

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How semiconductor export restrictions have impacted Nvidia under the Biden and Trump administrations

China has historically been a major market for Nvidia. It accounted for 26% of revenue in the fiscal year that ended in January 2022. But export restrictions dragged that figure down to 22% in fiscal 2023, 17% in fiscal 2024, and 13% in fiscal 2025. Meanwhile, CEO Jensen Huang estimates Nvidia's market share in artificial intelligence (AI) chips in China has fallen from 95% to about 50%.

The timeline below briefly explains how U.S. policy has evolved over time.

• September 2022: The Biden administration told Nvidia to stop exporting A100 GPUs and 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 repurposed and estimated it would lose $8 billion in revenue in the second quarter.

On the first-quarter earnings call, Nvidia CFO Colette Kress said, "Losing access to the China AI accelerator market, which we believe will grow to nearly $50 billion, would have a material adverse impact on our business going forward and benefit our foreign competitors worldwide."

CEO Jensen Huang has called the export restrictions a failure. He said in May:

The question is not whether China will have AI. It already does. The question is whether one of the world's largest AI markets will run on American platforms. Shielding Chinese chipmakers from U.S. competition only strengthens them abroad and weakens America's position.

The Trump administration will grant licenses allowing Nvidia to sell H20 GPUs in China

On Monday, July 14, Nvidia said it has filed applications to resume selling H20 GPUs in China and has received assurances from the U.S. government that licenses will be granted. The news came days after CEO Jensen Huang met with President Trump, and the company plans to begin delivering compliant AI accelerator chips to China soon.

Additionally, the Trump administration revoked the Biden-era AI Diffusion Rule earlier this year, which would have limited Nvidia's ability to sell its most advanced AI chips in dozens of countries that have historically been U.S. allies, including Saudi Arabia, the United Arab Emirates (UAE), Singapore, and Israel.

The Commerce Department said the AI Diffusion Rule, which was announced during the final days of the Biden administration, would have "stifled American innovation and saddled companies with burdensome new regulatory requirements." Additionally, it would have "undermined U.S. diplomatic relations with dozens of countries by downgrading them to second-tier status."

Nvidia has already capitalized on the rescission of the AI Diffusion Rule as more countries lean into sovereign AI -- meaning wholly owned data center infrastructure not subject to control by another nation. Earlier this year, the company announced partnerships that will bring its chips and networking equipment to Saudi Arabia and the UAE.

Wall Street analysts are likely to increase earnings estimates for Nvidia

Ultimately, the Trump administration's decision to permit the sale of H20 GPUs into China, coupled with its rescission of the AI Diffusion Rule, means Nvidia now has a larger total addressable market. In turn, Wall Street analysts are likely to raise earnings estimates, and upward revisions tend to correlate with share-price appreciation.

The Wall Street consensus currently says Nvidia's earnings will grow at 41% annually through the fiscal year ending in January 2027. That makes the current valuation of 54 times earnings look tolerable.

However, upward revisions to earnings estimates would make the stock even more attractive. Investors interested in adding shares to their portfolios should consider buying Nvidia stock now.

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