Nvidia is planning to increase its H200 chip production to meet the robust demand from its largest customer base, China. All focus is now on Nvidia’s stock prospects as an increase in sales could benefit its price. US President Donald Trump allowed Nvidia to sell its high-end H200 AI chip to the Chinese market last week. In return, the US government will get to pocket 25% of the sales, and Trump confirmed that Xi Jinping has agreed to the deal.
Demand for the new H200 AI chip is so strong from China that the GPU maker is evaluating its production capabilities. The GPU maker is leaning towards adding new production units to cater to the demand. Only a limited number of H200 chips are currently in production, as they are allowed to be sold to “approved customers” only. An increase in production and sales will help boost Nvidia’s revenues and, inadvertently, its stock price.
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Nvidia Stock Could Benefit From Robust Demand From China
Chinese enterprises are eager to purchase the H200 chip as it is three times more powerful than its predecessor H20. China will also use the chip to upgrade its own AI infrastructure. In addition, the US GPU maker is also working towards its most powerful Blackwell chip and Rubin chips, which will be even more powerful than the H200. Therefore, Nvidia will always be in high demand, and taking an entry position in NVDA stock is advised. It would also come with extensive red tape as the White House could limit its sales outside the US.
However, the launch date of the Blackwell and Rubin chips is yet to be announced. So, Nvidia’s stock will have higher prospects even in the long-term scenario. “Its (H200) compute performance is approximately 2-3 times that of the most advanced domestically produced accelerators,” said Nori Chiou, Investment Director at White Oak Capital Partners, to Reuters. “I’m already observing many CSPs (Cloud Service Providers) and enterprise customers aggressively placing large orders and lobbying the government to relax restrictions on a conditional basis,” he said.