After months of trade restrictions, NVIDIA Corporation (NASDAQ:) received the green light from Washington to resume deliveries of its H20 AI chips to the People’s Republic of China. This was announced by Nvidia CEO Jensen Huang at a press conference in Beijing. According to Huang, the US government has approved the application for the relevant export licenses.
The decision marks a significant easing of the trade conflict between the US and China. Although the details of the agreement have not yet been made public, both sides have apparently made concessions: Washington demanded that China relax its export controls on rare earths, while Beijing pushed for the lifting of US technology export bans.
Huang had previously held talks with US President Donald Trump on artificial intelligence. He also met with representatives from politics and industry in Beijing.
Since April, Nvidia’s H20 chips, and even their versions slimmed down specifically for the Chinese market, have been subject to strict export restrictions. Sales restrictions on high-performance chips had already been imposed under President Joe Biden due to concerns about military use by China. Nvidia pointed out that further technical reductions to the chips were no longer possible.
Before the restrictions, Nvidia had sold H20 chips worth US$4.5 billion to China. With the new approval, business could now pick up again.
Outlook for Nvidia shares
Once again, Nvidia has made all its critics look foolish. And once again, many failed to take advantage of the sharp correction to finally buy the stock. Too many assumed that Nvidia would crash. Well, the stock has comfortably doubled since its low of $86.00 to a high of around $170, and that in just three months.
The following comparison clearly shows how strongly Nvidia shares are outperforming the overall market and within the same industry:
Source: InvestingPro
But we want to know more. So let’s take a look at the Nvidia price chart to conclude.
First of all, we can clearly see that the stock has easily surpassed its previous all-time high of $153.74. We believe that we are seeing a very strong momentum move. The next target is the red box at $170.55 to $182.58, which the stock has already reached. In this respect, a correction could occur at any time, ideally bringing the stock back to the purple box at $156.77 to $135.44, with the ideal target being $144.97. Alternatively, the bulls could lift the stock slightly above the red box. However, this would not change the structure.
There, we should see an upward trend reversal and then a sharp rise to the next interim target. It is important to be aware that once the overall momentum has been completed, the stock will enter a very strong correction phase that could last for a long time. We show where the targets are and whether it is now worth buying AMD (NASDAQ:) shares in our synchronized video below this text.
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