Jim Cramer Discusses NVIDIA Return to China Market

NVIDIA Corporation (NASDAQ:NVDA) is one of the stocks Jim Cramer recently discussed. Cramer discussed the company’s business with China during the episode. He said:

“This morning, we learned that the US government is planning to take a 15% cut on all the AI chips that these two companies are currently selling to China. For NVIDIA, that means a 15% cut on the H20, which was their cutting-edge chip for AI a few years ago, something they were previously banned from selling in the PRC. The president then said that NVIDIA might be getting approval to sell a next-generation chip to the Chinese, something, wow, more like their current version, Blackwell, except it won’t have as much computing power. We didn’t expect that Blackwell could be allowed in China. This was a big deal that the market completely just ignored. That was a mistake. President had asked for 20% cut of revenues, but NVIDIA CEO Jensen Huang bargained him down to 15%. That was good…

The cost of shareholders for the NVIDIA deal, as we told investing club members today, NVIDIA was selling about $8 billion worth of chips to China every quarter prior to the previous export restriction. A 15% haircut would equate to a little more than $1 billion per quarter or about $5 billion per year. Hey, that’s a big number for most companies, but not for NVIDIA. They were desperate to get this China business back by any means necessary…

From the perspective of big business, this is a great deal. Under the previous export controls, NVIDIA and AMD couldn’t sell these ships to China at all. If they can get that business back in exchange for a 15% cut, that’s a win for their shareholders.”

Jim Cramer Discusses NVIDIA Return to China Market

NVDA Headquarters Courtesy of NVIDIA

NVIDIA Corporation (NASDAQ:NVDA) designs GPUs, AI platforms, cloud services, and software for gaming, professional visualization, data centers, automotive, and robotics applications.

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Disclosure: None. This article is originally published at Insider Monkey.