Nvidia says it's now getting orders from China. Is this the catalyst to get the stock out of its trading range?

By Jules Rimmer

Nvidia finally is ramping up sales of H200 chips to the Chinese market

Nvidia's GPU Technology Conference this week occasioned several positive developments and some bullish forecasts from CEO, Jensen Huang

Could a license approval from the Chinese government - and orders to prove it - finally be the prompt for Nvidia stock to break out of its narrow and longstanding trading range?

Amid the hullabaloo surrounding Nvidia's GTC event in San Jose, Calif. this week, the bigger news could come from Beijing. A Reuters story, quoting sources familiar with the matter, said that the world's largest company by market capitalization has now been authorized to sell its H200 chips to the Chinese market.

The H200 chips are Nvidia's second-most powerful, after the Blackwell chips that are the subject of a controversial export ban by the U.S. government. CNBC also carried a report that Nvidia's chief executive officer, Jensen Huang, had confirmed to them that his company had received the go-ahead from China and was restarting its production of the H200 chip.

Earlier this year, the Chinese authorities had preliminarily approved four of its biggest tech players DeepSeek, ByteDance, Tencent (HK:700) and Alibaba (BABA) to import the H200 but the final regulatory nod has only just been forthcoming.

That's not the only auspicious development for Nvidia in China, however. Reuters reported separately that the company is readying a version of its Groq AI chips for the Chinese market. These enable AI systems to respond to queries, to code and perform user tasks and they are expected to be available by May of this year.

Nvidia has found itself at the center of the Sino-American trade war launched by the White House in April and has been unable to export its products freely owing to restrictions imposed both by Washington and Beijing. The process of gaining license approval from both governments has proved painstaking and partly contributed to the recent convexity in its stock price.

Nvidia shares (NVDA) rose 1% in premarket trade, to $183.95.

Having peaked at $212 in October, the shares have largely been trapped in a narrow, 10% trading range between $180 and $200 despite positive earnings and several guidance revisions higher. So far in 2026 the stock has lost 2.5%. The shares have rerated lower as analyst forecasts have increased while the shares have languished and its 2027 price-to-earnings multiple of 22 times over the twelve months , according to FactSet, is pretty much the same as the overall S&P 500 SPX.

This re-rating prompted CNBC market commentator Jim Cramer to quip, "Honestly, Nvidia has become a value stock... sigh."

Related: Why Nvidia's stock is shrugging off a $1 trillion revenue forecast

Shareholders may also be encouraged by the disclosure by chief financial officer Colette Kress that going forward, Nvidia plans to return 50% of its free cash flow to investors via share buybacks and dividends. FactSet's estimate for free cash flow in 2026 is $178 billion, making a free-cash-flow yield of 4.05% at current market prices.

The GTC event this week has not impacted Nvidia's share-price paralysis yet but the positive newsflow may help to differentiate it from the rest of the AI sector that has been undermined by concerns about the huge capex spending in AI architecture. Huang announced this week that "Right now where I stand... I see through 2027 at least $1 trillion in revenue" while adding for good measure he was "certain" demand would prove stronger.

NVDA share price has recently failed to keep pace with its revenue growth

Bank of America's analyst on the stock, Vivek Arya ,reacted to the GTC by making Nvidia his "top AI pick" owing to its "leadership in AI backed by its broadening full-stack, end-to-end pipeline, extreme co-design with customers and supply assurance." Arya has a $300 price target, some 60% above current levels.

-Jules Rimmer

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03-18-26 0650ET