Nvidia (NVDA) enters a pivotal trading session on Monday, balancing the momentum from CEO Jensen Huang's latest product showcases at Computex in Taiwan against fresh headwinds from Washington's tightened export controls on advanced artificial intelligence chips.
The stock closed Friday at $211.14, slipping 1.45%, as the market absorbed a weekend move by the U.S. Commerce Department to enforce license requirements for advanced chips sold to companies based in China, even when those purchases are made through overseas subsidiaries. The updated guidance, reported by Reuters, targets a potential loophole that could have allowed Nvidia's top-tier Blackwell processors to reach Chinese entities outside mainland China. Nvidia has stated that its plans remain unchanged following the guidance, but the policy risk underscores a persistent vulnerability for the chipmaker.
At Computex, Huang unveiled the RTX Spark, a chip designed to handle AI workloads directly on laptops and desktops, reducing reliance on cloud computing. He also highlighted Vera, Nvidia's central processing unit for AI agents, calling it a "new major growth driver." Early adopters include OpenAI, Anthropic, and SpaceX, signaling strong demand from leading AI developers. This CPU push marks Nvidia's deeper incursion into a market long dominated by Intel (INTC) and Advanced Micro Devices (AMD).
Microsoft (MSFT) is poised to be a key partner, with reports indicating plans to launch Windows PCs powered by Nvidia chips as the central processor. Models from Microsoft's Surface lineup and Dell (DELL) are anticipated, potentially reshaping the PC landscape where Intel and AMD have traditionally supplied most CPUs.
The policy environment remains a critical factor. The Commerce Department's Sunday announcement aims to close a loophole that could have allowed Chinese firms to acquire advanced chips through foreign subsidiaries. Nvidia's second-quarter outlook already excludes any data-center compute revenue from China, highlighting the ongoing risk. Despite this, the company's first-quarter revenue surged 85% to $81.6 billion, with data-center sales climbing 92% to $75.2 billion, as reported on May 20.
Market observers are questioning whether new markets can sustain Nvidia's lofty valuation. "Nvidia delivered another beat, but at this point that's essentially priced in," said eMarketer analyst Jacob Bourne, noting that investors await evidence that the AI push will extend into 2027 and 2028. The bears argue that stronger export rules could keep China sales near zero for major product lines, while Microsoft, Amazon (AMZN), and Google (GOOGL) continue developing their own chips, potentially eroding Nvidia's revenue over time.
In a positive development, Nvidia announced a collaboration with humanoid robot makers, including China's Unitree, to produce robots for researchers. The robots will run on Nvidia hardware featuring secure boot and confidential computing to protect data and block malicious code. This expansion into robotics adds another growth vector.
South Korean electronics giants Samsung Electronics (SSNLF) and LG Electronics saw their shares rise in Seoul amid expectations of tighter supply-chain ties with Nvidia. CEO Jensen Huang is scheduled to meet with Korean executives, fueling speculation about partnerships in AI chips, memory, and robotics. "Nvidia needs Korea," noted Jeff Kim, an analyst at KB Securities.
As Monday's trading begins, the market will weigh the promise of Nvidia's expanding product lineup against the persistent risks from export controls that keep a key market politically uncertain. The outcome could set the tone for the broader AI sector, which increasingly views Nvidia as a bellwether.
