Investment Rating - The report assigns an "Attractive" industry view for the semiconductor sector in North America [8]. Core Insights - US AI stocks, including NVIDIA (NVDA), AMD, and AVGO, are expected to receive licenses to ship products to China, which is a significant positive development for 2026 [1][2]. - NVIDIA's management anticipates a recovery in revenue from China, which had previously dropped to below 10% due to export controls, with potential sales rebounding to 11-14% of total sales [4][6]. - The report highlights that NVIDIA's H20 product could represent a $50 billion market opportunity over time, although this figure is more political than a precise forecast [4]. - AMD's exposure to China is believed to be significant, although specific figures were not provided [5]. - The report suggests that the resumption of shipments could lead to an additional $20 billion in revenue for NVIDIA in calendar year 2026, which is above current forecasts [17]. Summary by Sections Section: Market Opportunity - Before export controls, China accounted for approximately 25% of NVIDIA's data center revenue, which fell significantly after the controls were imposed [4]. - The report indicates that the resumption of shipments could help NVIDIA mitigate the risk of China developing its own AI hardware ecosystem [16]. Section: Financial Impact - NVIDIA took a $4.5 billion writedown due to blocked H20 sales, with management indicating that the limitation cost them $8 billion in revenue for the July quarter [6]. - AMD also faced a writedown of $800 million, although the revenue impact was less clearly defined [6]. - The report notes that while the licenses have not yet been granted, the expectation of approval is encouraging, but the timing remains uncertain [10]. Section: Competitive Landscape - The report suggests that AMD may have a higher market share in China compared to NVIDIA, which could lead to increased upside for AMD's AI business [18][19]. - AVGO's exposure to China is relatively small but is part of a larger $60-90 billion market opportunity expected by 2027 [5][20]. Section: Stock Performance and Projections - NVIDIA remains the top pick in the semiconductor sector, with a price target of $170, reflecting a premium valuation due to its growth potential in AI [22]. - The consensus rating distribution shows 89% of analysts rating the stock as "Overweight" [29].

Group 1 - The core point of the article is that Nvidia's CEO Jensen Huang announced the new RTX Pro chip, which is designed for a new application called Nvidia Omniverse, aimed at digital twins and smart factories [1] Group 2 - The RTX Pro chip is specifically tailored for enhancing capabilities in digital twin technology, which allows for the creation of virtual replicas of physical systems [1] - Nvidia Omniverse is positioned as a platform that integrates various tools and technologies to facilitate collaboration in 3D design and simulation [1] - The focus on smart factories indicates a strategic move by Nvidia to tap into the growing demand for automation and digital transformation in manufacturing [1]