Nvidia faces mounting challenges in China as authorities warn domestic companies against using American AI chips, despite the semiconductor giant’s recent diplomatic efforts to resume exports of its H20 chips. The irony is stark: after accepting a 15% export tariff, Nvidia now confronts a de facto embargo. Meanwhile, technical struggles with Chinese alternatives, like Huawei’s Ascend chips, reveal Beijing’s dilemma—local options remain uncompetitive, forcing reliance on Nvidia. Adding to the tension, Nvidia’s CEO sold over $40 million in shares near record highs, sparking timing concerns.
Networking Segment Shines Amid Uncertainty
Beyond China, Nvidia’s overlooked networking business—generating $12.9 billion last year, surpassing gaming—proves resilient. Technologies like NVLink and InfiniBand underpin AI data centers, ensuring long-term growth. Analysts remain optimistic, raising price targets to $225 amid projections of $50 billion in annual China revenue by 2027. However, mixed signals persist, as a prominent investor exited Nvidia positions, and infrastructure margins in the AI sector show alarming declines. The stock, trading at $183.16, now hinges on geopolitical and technical balancing acts.
