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Investing.com -- NVIDIA’s anticipated return to the Chinese market through its H20 GPU could unlock billions in lost revenue and bolster earnings, according to Bernstein.
Following meetings in Washington and Beijing, NVIDIA (NASDAQ:NVDA) said it is “filing applications to sell the NVIDIA H20 GPU again,” and that “the U.S. government has assured NVIDIA that licenses will be granted.”
While Bernstein noted this is not “100% the same as ‘H20 licenses have absolutely been granted,’” the firm said it “seems close enough.”
Bernstein viewed the development as a positive reversal after April’s abrupt ban, which cost NVIDIA an estimated $8 billion in potential revenue for the current quarter.
“We might expect substantial catch-up in the 2H, as well as (hopefully) some release of the sizable ($4.5B) inventory reserve they took,” Bernstein said, although it added that it remains uncertain “if all customers behind that $8B will receive licenses.”
The firm estimates that “every ~$10B of recovered NVDA China revenues would drive roughly 25 cents in additional EPS,” with the potential for “40–50 cents in EPS upside for FY2026” if NVIDIA captures $15–$20 billion in incremental revenue.
Beyond the financial upside, Bernstein noted that the ability to compete in China helps NVIDIA maintain its ecosystem edge.
“We always saw the H20 ban as unnecessary and, frankly, somewhat nonsensical,” the analysts wrote.
Bernstein maintained its Outperform rating on NVIDIA, with a $185 price target, while reiterating its Market Perform rating on AMD (NASDAQ:AMD), which also suffered from export restrictions.