After US President Donald Trump gave the approval for Nvidia’s H200 processors to be exported to China, the AI chipmaker has begun making preparations.
Citing two sources, a Reuters report revealed that Nvidia has told Chinese clients it is evaluating adding production capacity for the AI chips after orders exceeded its current output level.
The sources said that demand for the H200s is so robust that Nvidia intends on adding more production capacity.
While the US administration has permitted export of the H200 AI chips, it is still uncertain whether China will allow the purchase of these chips. The country is already doing its best to wean off American technology and promote local semiconductor development.
“While this move reopens the door for U.S. revenue, the strategic train has already left the station.”
-Neil Shah, partner at Counterpoint Research, told CNBC on Tuesday.
Shah believes that China is catching up fast, and that it is only wise that it becomes self-sufficient to avoid being exposed to ongoing political and export-control uncertainty.
“Capability wise, the Chinese ecosystem is catching up fast from semi to stack with models optimized on the silicon and software for significant local consumption.” He added that China getting “locked in” to Nvidia chips is a “liability with a hanging sword of political uncertainty.”
“This makes domestic self-sufficiency the only viable long-term strategy for Beijing,” Shah said.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q3 2025.
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10. Synopsys, Inc. (NASDAQ:SNPS)
Number of Hedge Fund Holders: 83
Synopsys, Inc. (NASDAQ:SNPS) is one of the 10 AI Stocks in the Spotlight for Investors. On December 11, Bank of America upgraded the stock to “Buy” from neutral and raised its price target to $560.00 from $500.00. The bank said that following latest results, shares of Synopsys are attractive at current levels.
“We believe the relative derisking of China and Intel sales along with strong growth at Ansys clears the decks for Synopsys to provide attractive stock catch-up potential and EPS beats for the next year.”
According to analysts led by Vivek Arya, the company’s non-GAAP EPS guidance for the full fiscal year 2026, at $14.36 midpoint, is well ahead of consensus ($14.11). The team raised its fiscal year 2026/2027 non-GAAP EPS estimates to $ 14.37 and $17, respectively.
“While the stock could consolidate at current-levels after the ~20% recent run, we believe it provides an attractive lower-beta, AI-levered/adjacent candidate with recurring sales tied to more resilient chip design R & D spending.”
Synopsys, Inc. (NASDAQ:SNPS) is a technology company that provides software and services for silicon-to-systems design, including electronic design automation (EDA) tools, silicon IP, and system verification and validation.
9. Arista Networks Inc (NYSE:ANET)
Number of Hedge Fund Holders: 92
Arista Networks Inc (NYSE:ANET) is one of the 10 AI Stocks in the Spotlight for Investors. On December 11, Evercore ISI reiterated an “Outperform” rating on the stock with a $175.00 price target. While the firm remains bullish on ANET’s networking demand, it has removed the stock from its Tactical Outperform list.
“We’re removing our Tactical OP on ANET following its Sep-qtr print last month. We believe the negative stock reaction since the report is a reflection of forward estimates not moving up in a material manner, as ANET maintained their expectation of 20% sales growth in CY26 and investors had speculated they would move higher.”
Since the firm added the stock to its TAP list in October, shares of the stock are down an estimated 7.5%; while the S&P climbed 3.3% in the same period. Despite this decline, September quarter saw revenue grow an estimated 27% year-over-year, driven by ramps across AI and strength on the enterprise side. Gross margins in the quarter were 65.2%; above expectations.
The firm believes that the lack of upside for ANET reflects conservative guidance and shipment variability issues. This conservatism, it believes, will set the stage for upside as CY26 progresses.
“Net/Net: We continue to believe that networking as a whole will see further outsized growth from not just scale-out but also scale-up and scale-across, with ANET well positioned to benefit from these accelerated investments.”
Arista Networks Inc (NYSE:ANET) develops, markets, and sells cloud networking solutions.
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