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UPDATED: Nvidia (NVDA) Will “Walk Away” From China, Strategist Says

Nvidia’s (NVDA) business in China has been largely eliminated by America’s export restrictions, Morningstar Equity Strategist Brian Colello told Yahoo Finance recently.

As a result, the giant chip maker is likely to completely abandon the world’s second-largest economy, he stated.

The Last Straw

Washington ‘s decision to prevent Nvidia (NVDA) from selling its H20 chip in China “was probably the final straw” for NVDA’s ability to market “halfway decent chips” in the country, Colello said.

As a consequence, he believes that China-based Huawei can now sell higher-quality chips than NVDA in China or will soon be able to do so.

NVDA Disputes Colello’s View

In an email to Insider Monkey on May 1, NVDA wrote “NVIDIA has never said it would walk away from China. ” In the past, NVDA has stated that it ” would need to get a license for selling product to China under US regulations,” the company pointed out.  The latter statement does “not “mean or imply” that it  “would walk away,” the chip maker added.

NVDA called Colello’s belief that it would abandon China a ” big leap.”

The Silver Lining for NVDA

 The percentage of revenue that Nvidia (NVDA) obtains from China has already dropped, Colello said. Moreover, the company can still grow significantly even though it will only focus on the U.S. and Europe going forward, he said.

The Recent Price Action of NVDA Stock

  In the last month, the shares have lost 3.5%, while they have retreated 14% in the last three months.

While we acknowledge the potential of NVDA, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires

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

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