According to investment firm Wedbush, a new agreement in the U.S. allowing chip manufacturers Nvidia (NVDA) and AMD (AMD) to sell AI chips in China could significantly boost the growth of the AI industry. Notably, Nvidia is said to be allocating 15% of its earnings from the H20 AI chip, with AMD doing the same for its Mi308 chip. While the specific terms of this arrangement are somewhat unconventional and may prompt legal and policy scrutiny, analysts led by the highly regarded Daniel Ives view it as a pivotal growth opportunity—not just for Nvidia and AMD, but for the broader U.S. tech sector.
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Furthermore, analysts indicated that if President Donald Trump continued to restrict Nvidia’s H20 chips, he would have inadvertently provided Huawei with a $15 billion annual advantage, enhancing China’s AI capabilities at the expense of U.S. tech firms. The prevailing strategy seems to strike a balance between national security and fostering American innovation. Wedbush characterized the current landscape as an “AI arms race” between the U.S. and China, commending the Trump administration for navigating it in a way that allows U.S. companies to remain competitive in the global market.
Ives and his team argue that the U.S. is, for the first time in three decades, leading China in the AI space, although the latter is quickly catching up, with firms like Huawei making substantial strides. The distinguishing factor remains that Nvidia develops essential chips fueling AI technology worldwide. Thus, as Ives puts it, giving 15% to the White House seems a “small price” to pay for access to China and other vital markets.
Current NVDA Price Insights
On Wall Street, analysts have reached a strong consensus, classifying NVDA as a buy based on 35 buy recommendations, three holds, and one sell in the last three months. The average target price for NVDA stands at $189.23 per share, suggesting a potential upside of about 4.2%.
