The artificial intelligence revolution just got a significant tailwind. In a surprise policy shift announced in late December, the Trump administration has authorized Nvidia to resume sales of its advanced H200 data center GPUs to approved Chinese customers—a decision that could reshape the competitive landscape of the global AI chip market and add billions to Nvidia's bottom line in early 2026.

The $2.5 Billion Opportunity

According to Reuters, Nvidia will soon regain access to what was once its second-largest market. With each H200 processor commanding a price tag of approximately $32,000, analysts estimate the company could sell between $1.28 billion and $2.56 billion worth of these chips into the Chinese market in the first quarter of fiscal 2027 alone—which begins at the end of January 2026.

The timing couldn't be better for Jensen Huang's chip empire. Nvidia already commands an estimated 80% of the AI chip market, according to Susquehanna, and enters 2026 with a staggering $275 billion backlog of data center chip orders. The China opening adds another layer to what was already shaping up to be a historic year for the Santa Clara-based company.

"This is the AI story some investors think they've missed, but it's just getting started."

— Dan Ives, Wedbush Securities

What Changed in Washington

The policy reversal represents a significant shift from the Biden administration's export restrictions, which had banned sales of Nvidia's most advanced chips to China in October 2022. The Trump administration's decision appears to balance national security concerns with the reality that American tech companies were losing market share to Chinese competitors who had accelerated their own chip development in response to the restrictions.

The H200, built on Nvidia's Hopper architecture, is specifically designed for training and running the large language models that power applications like ChatGPT. Approved Chinese customers—primarily major cloud providers and research institutions—will now have legal access to chips they had previously sought through gray market channels.

Fiscal 2026 and Beyond

The China access adds to what analysts already projected would be a banner year. Bank of America's Vivek Arya estimates Nvidia's revenue for fiscal year 2026 will reach $212.83 billion, with non-GAAP earnings per share of $4.66. Consensus estimates call for revenues to rise approximately 50% to $319 billion in fiscal 2027.

Wall Street's median price target of $250 suggests 36% upside from current levels, while Wedbush's Ives has set a base-case target of $250 by year-end 2026—representing a 33% gain.

Key Catalysts for 2026

  • Vera Rubin chip launch: Nvidia's next-generation architecture is expected to debut in 2026, maintaining the company's technological lead
  • Groq acquisition: The $20 billion deal brings LPU technology and top AI talent in-house
  • China revenue: Reopened access could add $5-10 billion in annual revenue
  • Data center demand: AI capital expenditures from major tech companies expected to approach $520 billion in 2026

The $1 Trillion Semiconductor Surge

Nvidia's China opportunity is part of a broader semiconductor renaissance. In a recent report titled "2026 Year Ahead: choppy, still cheerful," Bank of America analyst Vivek Arya forecast a 30% year-over-year surge in global semiconductor sales that will push the sector past a historic $1 trillion annual sales milestone in 2026.

The industry, according to BofA, is at the "midpoint" of a decade-long transformation led by Nvidia and Broadcom—a transformation that shows no signs of slowing despite elevated valuations and concerns about AI adoption timelines.

Risks to the Bull Case

Not everyone is convinced the good times can continue indefinitely. Some analysts point to the possibility of AI disappointment as the number one market risk in 2026. If enterprise adoption of AI fails to meet lofty expectations, or if competition from AMD, Intel, and emerging Chinese players intensifies, Nvidia's premium valuation could face pressure.

There's also the question of how China will respond to renewed American chip sales. Beijing has been investing heavily in domestic chip development, and some Chinese companies may prefer to support homegrown alternatives rather than return to dependence on American technology.

The Investment Case

For investors, the calculus is relatively straightforward: Nvidia enters 2026 with a dominant market position, a massive order backlog, and now restored access to the world's second-largest economy. The question isn't whether demand exists—it's whether Nvidia can manufacture enough chips to meet it.

A gain of 20% or more seems like a reasonable expectation for Nvidia in 2026, according to several Wall Street analysts. For a company that has already delivered returns that have made it one of the most valuable in the world, that would represent another remarkable year—and another chapter in what is becoming one of the great business stories of our time.