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This week began with a major announcement from one of China’s most prominent tech leaders. Huawei revealed plans that could severely compromise Nvidia's (NVDA) position as the market’s dominant chipmaker.
Since the launch of ChatGPT kicked off the current AI revolution in November 2022, Nvidia has enjoyed the position as the field’s undisputed leader. Its highly priced graphics processing units (GPUs) have helped power many tech companies’ AI innovations, becoming a bedrock of the industry.
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Even as other companies have scrambled to build their own in-house chips and lessen their dependence on Nvidia, the chipmaker has enjoyed mostly stable growth until 2025. Now, as geopolitical tensions threaten U.S.-China trade relations, Huawei is making a move that could threaten Nvidia’s share of a booming tech market.
However, one analyst recently made the case for why investors shouldn’t worry about NVDA stock, even if Huawei’s chip progress continues.
Analyst has shocking take on what the latest China news means for Nvidia
For years, as Nvidia has surged to the top of the red-hot AI market, experts have wondered if its growth can last and for how long it can maintain its sizable market share. Ultimately, most stocks garnering that type of momentum reach their peak and end up trading at a more sustainable level.
Related: Nvidia could see an unexpected benefit from the trade war
In January 2025, Nvidia faced its first major challenge when Chinese AI startup DeepSeek released a large language model (LLM) built on less advanced chips, triggering a massive selloff for NVDA and its peers as experts speculated that a shift could be coming.
Now Huawei is getting to start testing the Ascend 920, a chip it believes can be more powerful than the Nvidia H100, a popular GPU used by companies such as Tesla and Meta. NVDA stock initially fell on news of this development and is having a hard time recovering.
“The Ascend 920, using SMIC's 6-nanometer technology, would be the successor to Huawei’s 910C and 910D,” reports TheStreet’s Todd Campbell. “The 910 series is historically built on 7-nanometer technology. The 920 may offer performance that rivals Nvidia’s H20, while the 910C and 910D rival Nvidia's popular H100 chip performance.”
This may seem like bad news for Nvidia, as the company could be about to have a new competitor with a clear advantage in the Chinese market. But Richard Windsor, founder of market research firm Radio Free Mobile, recently stated that any panic over the Huawei news may be overblown.