What the China export easing means for Nvidia, AMD, and other chips stocks
The US government is reportedly considering loosening export restrictions, which could allow the tech giants to resume sales of some lower-end AI chips to China. This policy shift comes after April's export ban blocked chips such as Nvidia's H20 AI accelerator and AMD's MI308.
'This is a game changer,' Dan Ives, managing director of Wedbush Securities, told Yahoo Finance. 'Nvidia stands to gain billions in annual revenue from China, and every Nvidia supplier is going to benefit, as well as second and third derivative plays.'
Bank of America (BAC) raised its price targets for Nvidia and AMD to $220 and $175, respectively, in anticipation of license approval. Favorable regulation could boost Nvidia's earnings per share by 5%-7% and AMD's by 3%-5%, its analysts estimate.
But it's not just Nvidia and AMD that stand to gain.
"It's a silver bullet positive for the AI buildout sector,' Ives said.
If China's cloud and data center buildouts ramp back up, companies like Broadcom (AVGO) and Marvell Technology (MRVL), whose custom chips support AI infrastructure, could benefit. Credo Technology Group (CRDO), a high-speed interconnect supplier, may also see demand rise alongside broader server deployments. All three stocks carry a Buy rating from BofA.
The clearest beneficiaries may be at the heart of chip manufacturing. Taiwan Semiconductor Manufacturing Company (TSMC), which produces Nvidia and AMD's chips, and Samsung Electronics (SSNLF), a key supplier of high-bandwidth memory, are well-positioned to capture a rebound.
Read more: How does Nvidia make money?
'If I'm pointing to derivatives, I'm pointing to Samsung and TSMC,' Matt Bryson, managing director of research at Wedbush Securities, told Yahoo Finance. 'They're literally working on the parts Nvidia and AMD are shipping.'
Bryson said that before April's export ban, Chinese server build activity was the 'number one positive inflection' the industry was watching. The momentum stalled in the second quarter, but could quickly return if policy changes are confirmed.
The semiconductor market is rapidly expanding as AI advances. Gaining approval and reopening the key Chinese market, even partially, shifts sentiment across the sector. Nvidia CEO Jensen Huang estimated the Chinese AI market is worth $50 billion.
Still, the exact effect on balance sheets will be hard to pin down in the near term. Nvidia's first quarter earnings reported a $2.5 billion drop in China revenue and a $4.5 billion inventory write-off. An additional $8 billion loss is anticipated in the second quarter.
The semiconductor market is rapidly expanding as AI advances. Gaining approval and reopening the key Chinese market, even partially, shifts sentiment across the sector. Nvidia CEO Jensen Huang estimated the Chinese AI market is worth $50 billion. 'China is one of the best areas they [AMD] could break into,' Ives said.
Bryson pointed out that even if the chipmakers get the green light to resume shipments and see some revenue bounce back, it's a big question mark whether the demand is even still there. Chinese customers might have already found other suppliers or simply moved on.
Francisco Velasquez is a Reporter at Yahoo Finance. He can be reached on LinkedIn and X, or via email at francisco.velasquez@yahooinc.com.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Insider
27 minutes ago
- Business Insider
Nike salaries revealed: How much the retail giant pays designers, software engineers, and other tech workers
As Nike tries to mount a comeback and live up to its reputation as a dominant retail force, the sportswear giant appears to be investing in some tech and design jobs. Publicly available work visa data, which companies are required to disclose to the US Department of Labor, gives an idea of how much Nike's employees bring home and some of the roles it has invested in. Nike had about 890 open positions worldwide listed on its jobs board as of July 18. Current CEO Elliott Hill, who rejoined the company in October, has told investors that Nike is aligning its employees to focus on five key action areas: culture, product, marketing, marketplace, and connecting with consumers on the ground in their communities. That strategy plays into Nike's efforts to focus its marquee brands — Nike, Jordan, and Converse — on key sports such as running and basketball. "We are in the midst of realignment at Nike," Nike said in a statement to Business Insider. The realignment and sport strategy aim to "create sharper distinction and dimension" for its brands, the company said. Here's what some key Nike roles can earn based on data through the quarter ending in March. The salary data includes information from Nike Inc. and some subsidiaries, such as its retail services arm and Air Manufacturing Innovation division. It reflects US-based roles and, given it's based on H1-B visa disclosures, tends to skew more tech-focused. Data and engineering roles: Software engineers can earn more than $300,000 Software Engineer II: $156,641 to $172,780 a year Software Engineer III: $139,845 to $192,227 a year Data Engineering: $99,123 to $265,466 a year Data Analytics: $114,600 to $163,985 a year Materials Designer: $100,000 a year Senior Digital Product Designer: $126,617 a year Senior 3D Designer: $91,707 a year Manager roles: Managers can take home more than $270,000 Delivery Excellence, Uniform Operations Manager: $164,439 a year Product Manager: $154,577 to $204,753 a year Senior Program Manager: $147,434 a year
Wall Street Journal
29 minutes ago
- Wall Street Journal
Firing Powell Would Shatter the Economy's Inflation Defenses
The U.S. has endured a series of inflationary shocks in the past few years: pandemic disruptions, massive fiscal stimulus, Russia's invasion of Ukraine, an immigration clampdown, tariffs and soaring projections of national debt. Yet throughout, investors have expected that in a few years' time inflation will be around 2%. The reason: They instinctively assume that no matter the shock, the Federal Reserve is there to keep inflation low, like the brakes on a car.
Yahoo
an hour ago
- Yahoo
Want to Invest in Quantum Computing Without the Crazy Risk? Buy These 3 Stocks.
Key Points Alphabet is playing to win in the quantum computing space. Microsoft believes it will build a scalable quantum supercomputer within "years, not decades." Nvidia is investing heavily in quantum computing and has an all-star lineup of partners. 10 stocks we like better than Alphabet › Some things come in pairs. Chopsticks, gloves, salt and pepper, socks, and cartoon characters Tom and Jerry come to mind. Unfortunately, so does investing in quantum computing stocks and a high level of risk. While quantum computing is highly promising, it's still a largely unproven technology. Several of the small, high-flying quantum computing stocks on the market could become even bigger winners over the next several years -- or they could go bust. Want to invest in quantum computing without the crazy risk? Buy these three stocks. 1. Alphabet Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google Quantum AI (artificial intelligence) has achieved two major quantum computing milestones in recent years. In 2019, its quantum technology solved a problem in 200 seconds that the company said would have taken the world's fastest supercomputer 10,000 years to handle. In 2023, Google Quantum AI made a big breakthrough in quantum error correction. Make no mistake about it: Alphabet is playing to win in the quantum computing space. But unlike the smaller quantum computing companies, the Google parent is already highly profitable (raking in over $100 billion in earnings last year). Alphabet is also sitting on a cash stockpile of $95 billion, enough to gobble up all the smaller rivals if it wanted to. Alphabet isn't generating much money from its quantum computing efforts yet. The company's cash cow is still its advertising business, led by Google Search and YouTube. Google Cloud is also the fastest-growing member of the top-tier cloud providers. Granted, buying Alphabet comes with some risk. Google is appealing two major antitrust lawsuits, and generative AI could eventually threaten the company's search engine dominance. However, these risks aren't as great as those of some quantum computing companies. I think Alphabet will continue to be a big winner for investors over the long run. 2. Microsoft Like Alphabet's Google Quantum AI, Microsoft (NASDAQ: MSFT) has accomplished two big milestones on its quantum computing roadmap. In May 2023, it announced a breakthrough that enables the creation of a new type of qubit (the quantum bit that's the basic unit of information in quantum computing). Earlier this year, Microsoft introduced Marjorana 1, a quantum chip that uses the world's first topoconductor (a material that helps create more scalable qubits). Microsoft's goal is to build a scalable quantum supercomputer in "years, not decades." The company claims that it's "leading the industry with advanced technology that accelerates scientific discovery." For some businesses, those statements might be dismissed as mere hype. But with Microsoft, which made $270 billion in sales over the last 12 months, I wouldn't be so skeptical. Few companies are as heavily invested in as many high-growth areas as Microsoft. In addition to quantum computing, Microsoft is a leader in artificial intelligence (AI), cloud services, cybersecurity, and augmented reality/virtual reality. Investing in Microsoft isn't risk-free. The company could stumble, and/or the stock's valuation (shares trade at 33.4 times forward earnings) could become problematic. But the risks associated with this tech titan are trivial compared to those of a business that's burning through cash. 3. Nvidia Nvidia (NASDAQ: NVDA) CEO Jensen Huang sparked a sell-off of quantum computing stocks early this year after stating that quantum computing won't be "very useful" for at least another 15 years. He later backtracked on those comments. The reality is that Huang's company is investing heavily in quantum computing. Nvidia is building an accelerated quantum research center in Boston. It has also developed CUDA-QX, a collection of libraries and tools to help quantum researchers use Nvidia graphics processing units (GPUs) to accelerate their applications. And the company is partnering with many of the world's leading quantum computing pioneers. Does Nvidia's success hinge on quantum computing fulfilling its potential? Not at all. AI should provide a sufficiently strong tailwind to keep Nvidia's revenue and profits growing for a long time to come. Sure, Nvidia faces some challenges. Rivals and even customers have developed their own AI chips. Chinese tech company DeepSeek has also raised concerns that the underlying technology of AI models could require significantly fewer GPUs, potentially threatening Nvidia's growth. However, Nvidia's chances of delivering market-beating returns over the next decade still look pretty good, in my view. Should you buy stock in Alphabet right now? Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keith Speights has positions in Alphabet and Microsoft. The Motley Fool has positions in and recommends Alphabet, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Want to Invest in Quantum Computing Without the Crazy Risk? Buy These 3 Stocks. was originally published by The Motley Fool Sign in to access your portfolio
