Nvidia Gets China — But at What Price? The Partial-Deal Scenario Plays Out Before Our Eyes

Yesterday in this space we sketched three scenarios for the Trump-Xi summit: Big Win, Partial Deal, Walk-Away. We gave Partial Deal a 45 percent probability. Today, less than 24 hours later, we see the first concrete results – and they fit exactly into that scenario.

Reuters reported this morning that the US has cleared about 10 Chinese firms to purchase Nvidia’s H200 chip. No deliveries yet, but the signal is there. Nvidia shares jumped over 2 percent to $225.40. Markets reacted exactly as our scenario had predicted. The Dow Jones reclaims the 50,000 mark, gaining 307 points. The S&P 500 climbs 0.4 percent to a new all-time high of 7,444. The Nasdaq Composite also climbs to record territory, lifted by semiconductors.

For investors who read our three-scenario analysis yesterday, today is the moment when theory becomes reality. The question is no longer „what happens at the summit?”, but „who concretely profits – and what was conceded in return?”

What the H200 Deal Really Means

The H200 is Nvidia’s second-strongest training GPU. It is slower than the H100/H200 successor Blackwell B200, but more than sufficient for most Chinese AI applications. A license to ship to 10 Chinese firms may sound limited – but each of these firms will likely order several thousand GPUs once the ink is dry.

In dollar terms: A single H200 system costs between $30,000 and $40,000 depending on configuration. If each of the 10 cleared firms buys 5,000–10,000 GPUs in the first year, we arrive at an additional market of $1.5–4 billion – just for H200, just in the first wave. If restrictions are further loosened and Blackwell follows, we are talking about $15–25 billion additional addressable market volume over three years.

Relative to Nvidia’s current market cap, that is not transformative. But it is confirmation that the structural thesis remains intact. Goldman Sachs expects the talks to focus on tariffs and export controls. If the US is willing to concede on H200, that’s a trial balloon for further loosening.

What Xi Gets in Return

Here the story gets more interesting. Xi did not settle today simply for getting chips. Xi reportedly told the business leaders present that their companies could be „deeply involved in China’s reform and opening up” and that „China’s door will only open wider.” That’s diplomatic Chinese for: We accept your money and your technology, but only on our terms.

What was likely on Beijing’s wish list, being negotiated in the background:

• Iran pressure: Trump needs Hormuz reopening. China can deliver that because Beijing is Iran’s biggest oil customer. If Xi calls the Iranian foreign minister and says „take the deal,” the strait opens in days.
• Tariff pause: Punitive US tariffs tightened since 2024 cost Chinese exporters massively. A 90-day pause or selective rollback of specific tariffs would be concrete relief.
• Bilateral tech access: If Nvidia ships to China, China could grant US firms renewed access to critical-mineral exports (rare earths, gallium, germanium for semiconductor fabrication).
• TikTok question: Possibly the TikTok sale question gets taken off the table entirely. That would be a political win for Beijing without economic consequence for the US.

The deal is asymmetric, but it works both ways. That’s exactly good realpolitik.

Which Stocks Concretely Profit Now

Beyond Nvidia, the deal pulls several sectors along. Here the list, sorted by leverage:

Directly profitable

Nvidia (NVDA) remains the obvious winner. Target $250–280 in three to six months if the trend holds. Oppenheimer reiterated Outperform with a $265 target today, Bank of America Buy with a $320 target. At current $225, that’s 15–40 percent upside.

AMD profits indirectly but less directly than Nvidia. If Nvidia has to fill its China allocation, bottlenecks could form, and some customers shift to AMD. That’s the weaker story, but real.

Micron, SK Hynix, Samsung – memory makers profit mechanically from every GPU sale because HBM memory sits in every AI chip. If Nvidia ships more H200, they need more memory.

TSMC is the unavoidable beneficiary. They manufacture the chips for Nvidia. More chip sales = more wafer orders = higher margins.

Indirectly profitable

Apple (AAPL) hit $300 today for the first time in history. 27 stocks in the S&P 500 reached new 52-week highs today. Apple all-time high since IPO 1980, Analog Devices all-time high since 1972, Cisco all-time high since 1990 IPO. Tim Cook was at the table with Xi – China manufacturing security was likely confirmed at the highest probability.

Tesla profits less than hoped. Tesla China launched a new financing program for budget-conscious buyers after the company lost market share to Chinese rivals. That shows that even with better US-China relations, Tesla in China remains structurally pressured by BYD, NIO, etc.

Hidden profitable

Cisco is its own story. Cisco shares jumped 13 percent today after strong Q3 earnings and the announcement to cut 4,000 jobs for an AI-focused restructuring. Cisco and Amazon are each up 30 percent in the last two months. That’s the inconspicuous AI infrastructure trade most retail investors don’t have on their radar.

What Retail Investors Will Get Wrong Today

Here comes the smart money observation. If historical patterns hold, the following will happen in the next 48 hours: Retail investors will chase Nvidia. FOMO buys at $230–240 will push the price up. But smart money has been positioned for weeks. Hedge funds with good compliance teams expected the Trump-Xi outcome and accumulated in April/early May.

The smart money question is no longer „do I buy Nvidia?”, but „where do I take profits?”. Stan Druckenmiller and David Tepper typically sell into strength. What are they doing this week?

„At some point those investors will look up and, if they find a macro environment that has really turned against them, might look around and be like, ‘Alright, it’s time to take a few gains, because the promise that the war would be over hasn’t materialized.'”

Robert Mayfield, via Yahoo Finance

This warning should be taken seriously. The H200 deal does not solve the structural problems: Inflation stays, the Iran war continues, valuations are high. The market celebrates today because a specific risk box was checked. The other boxes remain.

What Investors Should Concretely Do Now

First, if Nvidia is in the portfolio: Reconsider position. With 15–40 percent possible gains starting today, partial profit-taking at $250 makes sense. Don’t sell everything – the story remains intact. But shifting 25–30 percent of the position to cash is discipline, not pessimism.

Second, if not in the portfolio: Be patient. Today’s already-priced-in optimism makes entry unprofitable. Wait for a pullback in the next two to four weeks. Geopolitics delivers pullback opportunities again and again.

Third, check indirect plays: TSMC, Micron, SK Hynix have not run as much as Nvidia, but they profit mechanically. Risk-adjusted they could currently be the better trades.

Fourth, build a hedge position: If the deal fails (Trump leaves Beijing without further details, Xi doesn’t deliver on Iran), the pullback comes hard. VIX calls with 30-day expiry as a hedge cost 1–2 percent of portfolio and protect from 5–10 percent downside.

Sam Stovall of CFRA formulated yesterday that bull markets don’t die from geopolitics but from mispriced risk perception. Today, with the H200 deal priced in and markets at all-time highs, the question has become simpler: Is risk perception now too optimistic?

The honest answer: Probably yes, but not extremely. The bull market still has room. But the easy gains of the last months are over. From here it gets selective.