While Reuters reports that China’s demand for H200 chips has already outpaced Nvidia’s current production capacity—and the company is considering ramping up output—the stock still closed lower last Friday. This disconnect highlights a key tension: strong fundamentals vs. short-term market sentiment.

Why the dip despite strong demand?

· Ongoing U.S.-China trade and export restrictions continue to create uncertainty, even if sales resume in some form.

· Broader tech sector volatility and profit-taking after Nvidia’s historic rally may be weighing more heavily than regional sales news.

· Investors may be waiting to see tangible revenue impact from H200 in upcoming earnings.

Could China sales be a catalyst?

✅ If Nvidia successfully navigates regulatory hurdles and scales H200 shipments to China, it could meaningfully boost top-line growth.

✅ Diversifying AI chip demand geographically reduces overreliance on any single market.

✅ Long-term AI infrastructure build-out in China remains a multi-year tailwind.

But risks remain:

· Geopolitical tensions could disrupt supply or sales channels at any time.

· Competition from local Chinese AI chips (like Huawei’s Ascend) is intensifying.

· Valuation at current levels still prices in near-perfect execution.

Bottom line:

The H200 demand story in China is fundamentally bullish, but the stock’s near-term direction will likely depend more on broader market sentiment, Fed policy, and upcoming earnings clarity. At around $176, Nvidia is pricing in both tremendous growth and significant risk.

For long-term AI believers, any pullback might be an accumulation opportunity. For traders, waiting for a confirmed breakout above $185 could be prudent.