Nvidia Corp (NASDAQ: NVDA) is in focus on Wednesday after Jensen Huang, its chief executive, said the AI darling has lost nearly half of its market share in China due to the Trump administration’s new export controls.
In a press conference at Computex, he went on to call those restrictions a “failure”, adding they’re not hurting China as much as they’re hurting the US businesses.
Huang’s remarks arrive shortly after US President Donald Trump secured a sizable multi-year AI infrastructure deal for Nvidia during his visit to the Kingdom of Saudi Arabia.
Following the tariffs-related crash, Nvidia stock is now up some 45% versus its year-to-date low.
US export controls may be helping China
According to Jensen Huang, recently tightened restrictions on the export of sophisticated chips have slashed Nvidia’s market share in China from a whopping 95% to just 50% within weeks.
Additionally, the federal controls are doing more harm to American businesses, also because they have motivated the world’s second-largest economy to accelerate plans of making its own chips, he added.
This could prove a threat to the US dominance in artificial intelligence since Huang has already confirmed that Beijing is “right behind” Washington in AI, and now that it’s motivated to design its own chips, it could gain further ground on that front in no time.
Note that Nvidia shares are still down some 10% versus their year-to-date high.
Huawei could gain share if Nvidia is restricted from selling to China
Stacy Rasgon, a senior Bernstein analyst, also agrees that making it harder for Nvidia to play in China, the Trump administration is practically giving away the region’s AI market to Huawei.
Huawei’s capabilities in artificial intelligence are not lost on Jensen Huang either.
“They’re incredible in computing and network technology, all essential capabilities to advance AI.
They have made enormous progress in the last several years,” he acknowledged in a recent statement.
Investors should note that there have already been reports of Huawei working on its advanced chip that could go neck-and-neck with the US chipmakers, including NVDA, in the coming years.
Is Nvidia stock worth buying ahead of Q1 earnings release?
Huang’s remarks arrive a week before Nvidia is scheduled to report its earnings for fiscal Q1.
Consensus is for the artificial intelligence company to earn 82 cents a share in its current quarter, well above the 58 cents per share it earned in the same quarter last year.
Ahead of the chipmaker’s release, the AI stock is worth owning, argued a Loop Capital analyst, Ananda Baruah, in his research note on Wednesday.
Baruah maintained his “buy” rating on NVDA shares this morning.
He’s convinced the stock could hit $175 over the next 12 months. The analyst’s price target indicates potential upside of another 30% from current levels.
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