Nvidia has received approval from the Trump administration to resume sales of its H20 AI chip to China, following a ban earlier in the year. The chip, designed to comply with U.S. export controls, is in high demand among Chinese customers. This move could potentially reverse a $4.5 billion write-off for Nvidia and boost earnings.

China is a crucial market for Nvidia, generating $17 billion in revenue in the last fiscal year. The country’s reliance on Nvidia’s technology for AI hardware, coupled with shadow demand from gray market resellers, highlights the importance of China for Nvidia’s growth. The company is focused on balancing Chinese demand with U.S. regulations.

While Nvidia stock has been performing well, there are concerns about its valuation. The company is trading at about 40x forward earnings, with potential challenges such as plateauing demand for high-performance chips and a shift from training to inference in AI workloads. This could impact Nvidia’s earnings expansion in the future.

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Read more at NASDAQ: Nvidia Stock To $200 As H200 Exports To China Resume?