Trump Slammed the Door Shut, So Nvidia Crawled Through the Window to Protect $17B in China Sales

Here’s a not so shocking truth about government policy: the rules usually apply to you, me, and maybe your cousin Kyle… who’s still trying to write off his OnlyFans subscription as a “business expense.” But when you’re a $2.5 trillion tech monster with 77% control of the AI chip market and a CEO who practically speaks in strategy memos? You don’t follow the rules… you adjust them until they work in your favor. And that’s exactly what Nvidia is doing.

After Trump’s team told Jensen Huang that the H20 chip was a little too powerful for China and would now require a license to export, most companies would’ve folded like a Dollar Tree lawn chair. Not Nvidia. Instead of fighting it, they did what any high-functioning megacorp would do when boxed in by policy… redesign the box. Nvidia is now planning to roll out a “downgraded” version of the H20 chip in China by July. The new version will feature weaker computing power and smaller memory (basically a high-end chip with the training wheels back on), but it’ll still be strong enough to keep Baidu, Alibaba, and ByteDance lined up on the sidewalk like a bunch of drug addicts.

Now, if you’re wondering why a company would voluntarily water down its product, it’s simple: math. China brought in $17 billion of Nvidia’s $130.5 billion in revenue last year… that’s 13% of the company’s total haul. Losing it all at once would sting worse than a DeepSeek press release claiming they trained ChatGPT-level AI with a double A battery and leftover Starbucks gift cards. And the sting is already being felt. Nvidia expects to take a $5.5 billion hit in Q1 tied to canceled H20 orders, unsold inventory, and unfulfilled supply commitments. Bank of America thinks it could get worse, projecting that up to $20 billion in revenue is at risk if China retaliates or if export controls tighten even further (which feels likely).

Naturally, Jensen isn’t just going to sit back and watch Huawei eat his lunch. He’s been playing chess, not checkers… flying to Beijing in April (definitely not to open an advanced research lab, wink wink) and warning that if U.S. companies are boxed out, Chinese firms will just shift to local suppliers… or worse, start innovating on their own (can’t have that). In a post on X, he said U.S. leadership in AI depends “not just on what we restrict… but on what we enable.”

Now, about that stock. Nvidia’s down about 15% so far in 2025. The dip didn’t come out of nowhere. Between the U.S. tightening export rules, investors getting scared by DeepSeek’s cheap AI claims, and a natural breather after Nvidia’s record-setting 2024, it makes sense. But even with the pullback, Nvidia is still the undisputed king of AI hardware (the LeBron of chips, minus the flopping).

Last fiscal year, the company pulled in $115 billion in data center revenue alone. That’s not a typo. And its dominance is only getting stronger… Nvidia now controls about 77% of global wafer production for AI chips in 2025, up from 51% the year before (which pretty much means every AI server built this year has Jensen’s fingerprints on it).

The engine behind this momentum is, of course, Blackwell. Nvidia’s new GPU lineup is the foundation of the next generation of AI, and the biggest names in tech are spending like they just found out money expires. Meta raised its capex forecast to $68 billion. Microsoft is shelling out $80 billion. Alphabet? $75 billion… up 43% from last year (their CFO saw ChatGPT write a haiku and said, “build more servers”). A big chunk of that money is going straight into Nvidia’s pipeline.

And on the valuation side, things are finally cooling down. Nvidia’s P/E ratio dropped from a ridiculous 62 in January to a more digestible 38. It’s still not what you’d call “cheap,” but at least it no longer looks like a speculative crypto token with a founder who’s about to be sentenced to prison for fraud. Forward earnings are expected to climb nearly 50% this year… compare that to the S&P 500’s average of under 10%, and yeah, Jensen’s still in a league of his own. Analysts continue to drool over the stock, with a sea of buy ratings piling up like snow during a blizzard.

PS: It’s a mess out there.

One day the market’s ripping, the next day it’s Black Monday all over again. Recent earning’s reports have been a total coin flip. One stock beats and explodes 30%… the next misses by a penny and gets sent to the Shadow Realm. And through it all, everyone’s begging for Jerome Powell to finally cave and cut rates.

But underneath all the panic headlines (“Inflation too sticky!” “Recession imminent!” “Tariffs round 4 incoming!”) something wild is happening…

We’re seeing violent price action. Especially in the small-cap space, where low floats and high anxiety are creating the perfect recipe for 100%+ pops before lunchtime. Some of these names are moving 200%+ in under 24 hours… and to our knowledge, NO ONE else is covering them.

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Stock.News has positions in Starbucks, Meta, Microsoft, and Google.