Cramer Warns We're 'Flying Blind' On Nvidia In China — While Wall Street Rides The Reopening Trade

Core Insights - Nvidia Corp is facing increased scrutiny regarding its operations in China, with concerns about how Chinese commerce and policy changes will impact its stock performance [1] - The U.S. government has shifted its policy to allow limited shipments of Nvidia's H20-class chips to China, which traders view as a positive development for the company [2] - Global markets have reacted positively to signs of improved U.S.-China trade relations, with Nvidia's stock benefiting from this optimism [3] Policy Changes - The U.S. administration has authorized a path for resuming limited shipments of Nvidia's H20-class chips to China, involving revenue-sharing mechanics and raising political and legal discussions [2] - This policy pivot is seen as a de-risking event that could restore a significant market for Nvidia [2] Market Reactions - Global markets, including Japan's Nikkei, have rallied on signs of U.S.-China trade optimism, with Nvidia's stock rising as investors anticipate a normalization of AI trade [3] - Despite the positive market reaction, there are warnings about the unpredictability of Chinese commercial flows and potential volatility due to policy changes [4] Demand Outlook - Bulls argue that demand for Nvidia's products in China remains strong, despite the political uncertainties, suggesting that a reopening could lead to real bookings and shipment cadence [5] - The bear case focuses on the unpredictability of policies, while the bull case emphasizes the raw demand from Chinese cloud and AI buyers [5] Short-term and Medium-term Perspectives - In the short term, there is a warning about potential volatility in Nvidia's stock due to trade and export headlines [6] - In the medium term, if the U.S.-China trade thaw continues and export licenses lead to sustained shipments, Nvidia's growth narrative remains intact, driven by data-center AI demand and volume from China [6]