NVIDIA (NVDA) encounters regulatory challenges as China imposes tariffs on its H200 AI chips, a move that could impact revenue in a critical market. Despite the headwind, Wolfe Research maintains its bullish rating, citing NVDA’s entrenched leadership in AI infrastructure.
- China imposed a 25% tariff on NVIDIA’s H200 AI chips effective January 15, 2026
- China represented 18% of NVDA’s total revenue in fiscal year 2025
- Tariff could reduce H200 profit margins by up to 12 percentage points
- Wolfe Research maintains 'Outperform' rating, citing long-term AI leadership
- Next-gen Blackwell architecture expected in late 2026 to strengthen market dominance
NVIDIA (NVDA) is navigating a new trade barrier in China, where authorities have implemented tariffs on the company’s H200 AI accelerator chips, effective January 15, 2026. The tariff rate stands at 25% on the H200 model, which is designed for high-performance computing and AI workloads but falls under export control regulations due to its capabilities. This development comes amid tightening U.S.-China tech decoupling, with China seeking to restrict access to advanced semiconductor technologies. The H200 chip, positioned as a successor to the A100 and a key component in data center deployments, has seen strong demand across Asia-Pacific markets. According to internal company disclosures, China accounted for approximately 18% of NVDA’s total revenue in fiscal year 2025, making it one of the company’s top three regional markets. The new tariff could reduce profit margins on H200 sales by up to 12 percentage points, depending on pricing adjustments and local distribution costs. Despite the setback, Wolfe Research reaffirmed its 'Outperform' rating on NVDA, citing the company’s unmatched AI chip architecture, long-term roadmap, and dominance in the global data center market. The firm noted that NVDA’s next-generation Blackwell architecture, set for commercial release in late 2026, is expected to further widen the performance gap over competitors, including AMD and emerging Chinese chipmakers. Market participants are closely monitoring the implications for NVDA’s stock, which has gained 67% year-to-date as of January 17, 2026. While the tariff may pressure near-term earnings growth, analysts believe NVDA’s ecosystem lock-in — including software stack integration and developer adoption — provides durable competitive moats that mitigate geopolitical risks.