Nvidia Corp (NASDAQ:NVDA, ETR:NVD) shares moved higher after the chipmaker said on Tuesday it expects to resume shipments of its H20 graphics processing units (GPUs) to China shortly, after sales were halted due to US export restrictions.
The company said in a statement that it has filed the required applications with the US government and has received assurances that exports would be approved.
“The US government has assured Nvidia that licenses will be granted, and Nvidia hopes to start deliveries soon,” the company said.
The positive development follows a meeting between Nvidia CEO Jensen Huang and US President Donald Trump last week.
Huang also announced the launch of a new, fully compliant NVIDIA RTX PRO GPU that “is ideal for digital twin AI for smart factories and logistics.” It was unclear if “fully compliant” refers to being compliant with China export guidelines.
Analysts at Wedbush see the reversal of the prvious H20 ban as a “materially positive development” for Nvidia.
Notably, the company had indicated the ban would prevent them from shipping $8 billion in product in the July quarter, and the partial ban in April resulted in $2.5 billion in lost sales and a $0.15 hit to earnings per share.
Additionally, the company incurred a $4.5 billion charge in its April quarter associated with excess H20 inventoy.
Wedbush also noted that Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD) has indicated that it has received notice from the US government that export applications for MI308x parts will be reviewed.
“Net we would anticipate a resumption of sales by Nvidia and AMD to China would measurably boost revenues, as well as allowing both vendors to recoup previously written off inventory, boosting gross margins temporarily,” they wrote.
The analysts noted that Samsung Electronics (KRX:005930) supplied much of the memory for the banned parts and as such, the broader memory sector is likely to benefit from the resumption of AI product sales.
Further, Taiwan Semiconductor Manufacturing Co (ADR) (NYSE:TSM) fabbed all of these products, and the reopening of the China market should also benefit its forward outlook.
“The jump in China AI server builds in Q1 had more broadly lifted demand for server components. As such, we would see a US relaxation of export restrictions as more generally positive for the entire server component supply chain,” the analysts concluded.
Shares of Nvidia jumped 4.4% to about $171 late morning on Tuesday.
AMD was up 6.7% at about $156, while TSMC’s US-listed shares added 3.6% at about $237.