NVIDIA's H20 chip regains export license to China, Needham raises target price to $200

According to Zhitong Finance APP, NVIDIA (NVDA.US) recently announced plans to resume sales of its H20 chip to the Chinese market, stating that it has received assurances of an export license from the U.S. government. As a result of this news, well-known investment firm Needham raised its price target for NVIDIA stock from $160 to $200 and maintained a "buy" rating. The analyst team led by N. Quinn Bolton pointed out that the export ban on H20 products due to export controls in April this year resulted in NVIDIA being unable to fulfill $2.5 billion in chip shipments for the first quarter of fiscal year 2026, while nearly $8 billion worth of H20 orders originally scheduled for delivery in the second quarter were also forced to be suspended. Although NVIDIA has not disclosed specific revenue expectations for the H20 chip in future quarters, analysts have made conservative estimates based on market recovery expectations: starting from the third quarter of fiscal year 2026 (i.e., October), the quarterly shipment volume of this chip is expected to reach $3 billion. It is noteworthy that NVIDIA is developing Blackwell architecture GPU variant products (including models B30/B40/RTX 6000D, etc.) for the Chinese market, with related products expected to start shipping between August and September. This policy adjustment and new product layout are seen as an important strategic adjustment by NVIDIA to respond to demand in the Chinese market. The H20 is an AI accelerator designed by NVIDIA specifically for the Chinese market, based on the Hopper architecture, featuring 96GB of HBM3 memory and 4.0TB/s memory bandwidth. Its FP8 performance is 296 TFLOPS, and FP16 performance is 148 TFLOPS, with 41% fewer GPU cores and 28% lower performance compared to the H100. The H20 is more suitable for vertical model training and inference. However, the upgrade of U.S. semiconductor export control policies has posed challenges for NVIDIA's sales in the Chinese market. The U.S. Department of Commerce's Bureau of Industry and Security (BIS) has issued two important new export control regulations targeting the Chinese semiconductor industry, further tightening restrictions on China's access to advanced semiconductors and various end-use products. The new regulations revised the Export Administration Regulations (EAR), adding semiconductor manufacturing equipment FDP and FN5 FDP rules, limiting China's access to advanced semiconductor technologies and products. Against this backdrop, the export of NVIDIA's H20 chip was once hindered, leading to a large number of unfulfilled orders. However, with NVIDIA obtaining an export license from the U.S. government, the H20 chip can return to the Chinese market. This is undoubtedly good news for NVIDIA, helping to alleviate its sales pressure in the Chinese market. As of the time of writing, NVIDIA's stock rose slightly in pre-market trading, reporting $171. At the same time, NVIDIA is also actively developing new products to meet the demands of the Chinese market, and the launch of Blackwell architecture GPU variant products will further enrich NVIDIA's product line in the Chinese market