The Nvidia-China dance continues

Core Insights - Nvidia shares increased by 9.11% following indications that the U.S. may relax export restrictions on older AI chips to China, representing a significant revenue opportunity of $5 billion to $10 billion annually for the company [1] Group 1: Nvidia's Market Position - Nvidia's stock closed at $190.05 on February 11, ahead of its Q4 earnings report scheduled for February 25 [1] - The company reported zero sales of its H20 chip to China in Q2 FY26 due to existing export restrictions, indicating a substantial revenue loss [1] - The easing of restrictions could allow Nvidia to access a large addressable market without affecting its sales to U.S. hyperscalers, as older chips would enhance margin expansion [1] Group 2: Industry Context - The tech sector is investing nearly $700 billion in AI capital expenditures, with Nvidia potentially capturing 40-50% of this spending [1] - Competitors like Advanced Micro Devices (AMD) reported $10.30 billion in Q4 2025 revenue, up 34.5% year-over-year, highlighting the growth potential in the semiconductor AI market despite export controls [1] - Analysts have set a price target of $253.79 for Nvidia, indicating strong expectations for the company's future performance [1]