Nvidia (NVDA) Stock: White House Could Hand Nvidia a China Lifeline

TLDR

• Nvidia stock rose 0.8% in premarket trading on Monday morning
• White House reportedly considering allowing Nvidia to sell H200 AI chips to China
• Alibaba’s Qwen AI chatbot gained over 10 million users in first week after launch
• Semiconductor stocks down 11% in November, headed for worst month since 2022
• Major tech companies projected to spend $440 billion on capital expenditures over next 12 months

Nvidia shares climbed in early Monday trading. The move came as two pieces of China-related news hit the market.

NVIDIA Corporation, NVDA

The stock advanced 0.7% to $180.12 before the opening bell. This matched gains in Nasdaq futures and outpaced the S&P 500.

Potential H200 Chip Sales to China

The White House is reviewing whether to allow Nvidia to sell its H200 AI chip to China. Reuters and Bloomberg both reported the development last week, citing anonymous sources.

The Trump administration could lift restrictions on the high-end chip sales. The U.S. Department of Commerce is currently reviewing its policy on such exports.

Trade tensions between Washington and Beijing have weighed on Nvidia this year. However, recent signs point to easing restrictions.

China represents a massive market for AI chips. Nvidia has been locked out while competitors gain ground.

Alibaba AI App Boosts Market Sentiment

Alibaba shares jumped 3.9% in premarket trading on Monday. The move followed strong adoption numbers for its Qwen AI chatbot.

The app racked up more than 10 million downloads in its first week. The beta launch showed strong consumer appetite for AI applications.

This development benefits more than just Alibaba. Strong consumer demand for AI tools addresses bubble concerns that have plagued tech stocks.

Investors have questioned whether real demand exists for AI products. Qwen’s success provides evidence that consumers want these applications.

Mixed Signals for AI Trade

The AI sector faces growing division among investors. November has been rough for chip stocks, with the sector down 11%.

Thursday’s wild swing after Nvidia’s earnings highlighted the uncertainty. Shares initially jumped more than 5% before reversing to close down 3.2%.

The company’s quarterly results were strong. Revenue guidance came in 5% ahead of consensus estimates.

But investors are asking tougher questions now. Return on investment concerns dominate discussions about AI spending.

Companies like Meta and Microsoft have seen their stocks drop after earnings. Meta is down 21% since reporting on October 29. Microsoft fell 13% over the same period.

Big Tech Spending Continues

The major cloud providers show no signs of slowing their AI investments. Microsoft, Amazon, Meta, and Alphabet together represent more than 40% of Nvidia’s sales.

These four companies plan to increase combined capital expenditures by 34% over the next year. That totals $440 billion in spending.

The spending spree has created concerns about sustainability. Some companies are taking on debt to keep pace with competitors.

Oracle dropped 24% this month, on track for its worst monthly performance since 2001. CoreWeave plunged 46% in November.

Nvidia remains up more than 30% for 2025 despite the November pullback. The stock hit rough waters this month but maintains strong year-to-date gains.

The semiconductor index heads toward its worst month since 2022. Companies like AMD and Arm Holdings have fallen more than 20% in November.

The China developments on Monday provided a bright spot in an otherwise difficult month for chip stocks. Both the potential policy shift and Alibaba’s consumer success offered reasons for optimism.

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