Nvidia stock rose early on Friday as investors reacted to signs that the company may be nearing official US approval to resume exports of certain artificial-intelligence chips to China, easing one of the largest uncertainties weighing on the stock.
Shares of the chipmaker were up about 3% at $183.40 in early trading.
The Nvidia stock gained 1.9% on Thursday but remains down roughly 1.4% over the past three months, reflecting persistent investor caution around China exposure and export restrictions.
One of the key drags on Nvidia’s valuation has been uncertainty over whether it would regain access to China’s fast-growing AI processor market.
Developments in Washington suggest movement on that front, at least at the regulatory level.
Reuters reported, citing people familiar with the matter, that the US Commerce Department has sent license applications covering Nvidia’s chip sales to China for interagency review by the State Department, the Department of Energy and the Department of Defense.
The review process is a required step before export licenses can be granted.
Earlier this month, President Donald Trump said he would allow shipments of Nvidia’s H200 chip to China, provided the company gives the US government a 25% share of the sales.
That proposal marked a potential shift in US policy, though final approval has not yet been granted.
Limits of the H200 and Beijing’s role
The H200 chip is less powerful than Nvidia’s latest-generation Blackwell processors, which are increasingly manufactured using more advanced process nodes at Taiwan Semiconductor Manufacturing.
As production shifts toward newer chips, Nvidia is expected to have additional capacity to produce H200 processors, which could be allocated to China if approvals are secured.
However, regulatory hurdles remain on the Chinese side. It is still unclear whether Beijing will allow domestic companies to purchase the H200 at scale.
The Financial Times previously reported, citing people familiar with the discussions, that Chinese regulators are considering allowing only limited access to the chips, underscoring the uncertainty surrounding the potential reopening of the market.
Among other semiconductor names, Advanced Micro Devices rose 2.3% in early trading, while Broadcom gained 1.8%.
AMD is also awaiting US approval to export certain chips to China, making developments in Washington relevant across the sector.
Bernstein sees valuation support despite risks
While Nvidia shares may appear expensive on the surface, Bernstein argues the stock is trading at historically attractive levels after a prolonged period of multiple compression.
In a research note led by analyst Stacy Rasgon, Bernstein highlighted that Nvidia’s stock performance has lagged this year despite continued upward revisions to earnings estimates.
The firm noted that while Nvidia is up roughly 30% year to date, it has “substantially underperformed the SOX index this year,” even as estimates “have continued to march ever higher.”
As a result, Nvidia’s valuation has compressed meaningfully. Bernstein said the stock’s forward price-to-earnings multiple “has fallen by 27% through the year, currently sitting just a hair under 25x.”
While a 25x multiple may not appear cheap in absolute terms, Bernstein emphasised historical context.
“For this company, 25x forward EPS would suggest the shares are trading in the 11th percentile of valuation over the last 10 years,” Rasgon said.
Relative valuation appears even more compelling, according to the firm. Bernstein noted that Nvidia trades at roughly a 13% discount to the SOX index, placing it in “the first percentile” on a relative basis.
Over the past decade, there have been “only thirteen days where NVDA’s stock traded cheaper relative to the SOX than it is trading now,” the firm said.
Bernstein also pointed to Nvidia’s historical performance at similar valuation levels.
“Investors buying Nvidia’s stock at current levels have historically done very well,” the firm said, adding that purchases below 25x forward earnings over the past 10 years generated “average 1-year returns of over 150% with zero instances of a negative drawdown.”
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