Nvidia Leads AI Chip Market Despite China Export Restrictions, Says Bank of America

Nvidia Remains Top AI Chipmaker Amid Global Semiconductor Growth

Nvidia continues to dominate the AI semiconductor industry, with analysts at Bank of America (BofA) stating the company is still best positioned to benefit from the rapid adoption of artificial intelligence (AI) technologies. This comes despite recent challenges linked to tightened U.S. export rules affecting Nvidia’s business in China.

Strong AI Chip Sales Drive Nvidia Revenue Growth

Nvidia, the world’s most valuable chipmaker, recently posted better-than-expected quarterly results. This performance was largely fuelled by a surge in demand for its AI chips, as customers moved to secure inventory ahead of new U.S. export restrictions targeting high-performance processors used in AI applications.

U.S. Export Restrictions Impact Nvidia's China Business

The U.S. government has imposed stricter controls on the export of advanced AI chips to China, aiming to limit the country’s technological advancement in artificial intelligence. These restrictions have particularly affected sales of Nvidia’s H20 chip — the only AI GPU it was legally permitted to export to China.

As a result, Nvidia reported a loss of $2.5 billion in H20 chip sales in Q1 2025, while its Chief Financial Officer, Colette Kress, noted a decline in data centre revenue from the Chinese market. The company also warned that the ongoing export controls would reduce revenue by $8 million in the current quarter, prompting weaker financial guidance.

Bank of America: China Risk Now “Fully De-Risked” for Nvidia

Despite these challenges, Bank of America analysts remain bullish. Following a recent investor meeting with Nvidia executives, the firm believes China is now “fully de-risked” in Nvidia’s current forecasts. No Chinese sales are included in Nvidia’s near-term data centre revenue projections.

“While there may still be developments aimed at tapping the $50 billion AI market in China, any future sales in that region are expected to be incremental,” BofA’s report stated. Nvidia is also reportedly working on a modified version of its next-gen Blackwell chips to comply with Chinese export regulations.

Nvidia Expands Global Reach Beyond China

A recent policy change by former U.S. President Donald Trump — reversing a proposed AI diffusion rule — is seen as a major win for Nvidia and other U.S.-based AI chipmakers. The change removes limitations on the international flow of American AI technology, unlocking opportunities in other high-growth regions.

In line with this, Nvidia has signed major deals in the Middle East, including a flagship project to support a 10-square-mile data centre in the United Arab Emirates. Additional partnerships have also been inked in Saudi Arabia, marking further international expansion.

Nvidia Stock Outlook: BofA Maintains “Buy” Rating

Despite volatility in global equity markets, Nvidia shares have risen by 2.6% so far in 2025. Bank of America continues to rate Nvidia as a “buy” and maintains it as a “top pick” in the global semiconductor sector. The investment bank set a price target of $180 per share.

(Sources: investing.com, reuters.com)