Nvidia Stock Dips Premarket After Report Of China H200 Pullback: Revenue Fears Return?

• Nvidia has asked TSMC to produce its next-generation Vera Rubin hardware using the capacity earmarked for its H200 China-bound chips, according to an FT report.
• NVIDIA hasn't sold the H200s in recent months due to a months-long regulatory quagmire, during which a clear position hasn't yet emerged.
• In its quarterly report, Nvidia said its first-quarter forecast does not include H200 sales.

Shares of Nvidia Corp. fell 0.2% in early premarket trading on Thursday following reports that the chipmaker has halted production of its H200 processors for the Chinese market and redirected capacity at contract manufacturer Taiwan Semiconductor Manufacturing Company to ramp up output of its newly unveiled next-generation servers.

The stock move appears to reinforce investor concerns around Nvidia's persistent China exposure, with the unconfirmed development adding to a long-standing overhang that has weighed on the stock.

Nvidia has asked TSMC to use existing H200 capacity for Vera Rubin hardware, according to a Reuters report that cited a Financial Times article based on comments from people familiar with the matter. That would imply that Nvidia is no longer expecting significant H200 sales in China in the near term, even though recent news suggested that regulatory bottlenecks are easing.

Nvidia's China Problem

Last ​week, Nvidia said it had received licenses ​from the U.S. government to ship "small amounts" of its ‌H200 ⁠chips to customers in China. A similar approval from Beijing was largely expected to come through.

Nvidia is said to have lobbied hard with regulators on both sides, even as CEO Jensen Huang has maintained that demand for the H200 remained very strong. Nvidia's latest quarterly results confirmed that it had not sold a single H200 system, and its first-quarter forecast did not account for it either.

China accounted for at least one-fifth of Nvidia's data center revenue back in 2023. Over the past few years, new U.S. export rules forced Nvidia to develop the H200, a lower-capability chip earmarked for the Chinese markets. Last April, new rules required Nvidia to halt those sales, before U.S. President Donald Trump, in December, approved H200 sales provided the U.S. got a 25% cut of sales.

How Retail Traders Are Feeling About NVDA

On Stocktwits, retail sentiment for NVDA heading into Thursday was less 'bullish' than a day prior, though it has improved greatly from the beginning of the year. Retail message volumes indicate a dip in interest, with chatter down by over 82% in the past week.

Traders at large remain cautiously optimistic about Nvidia, even though its blowout fourth-quarter report failed to prevent a sharp decline in the days that followed. Overall, NVDA shares are down nearly 2% for the year, under

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Share

·

Add us on