TLDR
- Nvidia shares gained 0.7% in premarket trading Monday morning
- Trump administration may allow H200 chip exports to China according to reports
- Alibaba’s AI chatbot reached 10 million downloads in one week
- Tech giants planning $440 billion in AI infrastructure spending
- Chip sector down 11% this month despite positive Nvidia developments
Nvidia stock moved higher Monday as investors digested two positive developments from China. The chipmaker’s shares rose 0.7% to $180.12 before the market opened.
The White House is reconsidering export restrictions on Nvidia’s H200 AI chips. Both Reuters and Bloomberg reported the potential policy shift last week.
The Commerce Department is reviewing its ban on high-end chip sales to China. This could open a major market that Nvidia has been blocked from accessing.
“The regulatory landscape does not allow us to offer a competitive datacenter GPU in China, leaving that massive market to our rapidly growing foreign competitors,” a company spokesperson stated. The Commerce Department has not commented on the reports.
China Market Represents Major Opportunity
Trade restrictions have kept Nvidia out of the Chinese market while competitors expand. The country represents one of the largest potential markets for AI chips globally.
Recent signs suggest easing tensions between Washington and Beijing. This policy review could mark a turning point for Nvidia’s access.
Foreign competitors have gained ground in China while Nvidia sat on the sidelines. The H200 chip represents the company’s latest high-performance offering.
Alibaba AI Success Boosts Sector Confidence
Alibaba shares jumped 3.9% in premarket trading following strong user adoption numbers. The company’s Qwen AI chatbot surpassed 10 million downloads during its first week.
This rapid adoption addresses key concerns about AI demand. Investors have questioned whether consumers actually want AI applications.
The success extends beyond Alibaba. Strong consumer interest validates the broader AI investment thesis that has driven tech spending.
Questions about return on investment have weighed on AI stocks recently. Real user adoption provides tangible evidence of demand.
Tech Giants Continue Heavy Spending
The four largest cloud providers show no signs of cutting AI budgets. Microsoft, Amazon, Meta, and Alphabet plan to increase capital expenditures by 34%.
Combined spending will reach $440 billion over the next year. These companies account for more than 40% of Nvidia’s total sales.
The spending wave has raised sustainability concerns. Some firms are borrowing to fund their AI infrastructure buildouts.
November has been difficult for semiconductor stocks overall. The chip sector is down 11% this month, tracking toward its worst performance since 2022.
Nvidia’s recent earnings initially sparked a rally before reversing course. Shares jumped over 5% after results before closing down 3.2% that day.
The company beat expectations with revenue guidance 5% above consensus. But investors want clearer answers about profitability timelines.
Other AI-related stocks have struggled more severely. Meta dropped 21% since its October 29 earnings report. Microsoft fell 13% over the same stretch.
Oracle plunged 24% this month in its worst performance since 2001. CoreWeave crashed 46% as debt concerns mounted.
Nvidia maintains strong year-to-date performance despite the recent volatility. The stock remains up more than 30% for 2025.
The China-related news provided a positive catalyst during a challenging month. Both the potential export policy change and Alibaba’s consumer traction offered encouragement.
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