US President Donald Trump announced on Truth Social that Nvidia will be allowed to sell its AI GPUs in China, with the US government receiving a 25% cut of sales. This approval opens the door for Nvidia to generate significant revenue in China, despite potential competition from domestic parts. Shares rose 2% after hours and are considered undervalued.

While Nvidia’s H200 GPU may face competition in China, the positive response from Chinese President Xi is encouraging. The company’s fair value estimate remains at USD 240, with potential for increased revenue if H200 sales take off. Geopolitical factors and competition from Google’s TPUs are key risks for Nvidia’s future growth and market dominance.

Morningstar retains a Very High Uncertainty Rating for Nvidia, citing geopolitical challenges and competition as key factors. The potential for H200 revenue to boost fair value is significant, but Nvidia’s supply chain must expand to meet demand. Details on Chinese demand and license approvals will impact future projections for the company.

Read more at Morningstar: Nvidia: Approval to Sell H200 AI Accelerators Into China Appears Forthcoming