Nvidia's China Comeback Boosts Chinese Tech Stocks and AI Development

Nvidia's China Comeback Sparks Rally In Alibaba, Baidu, Tencent Shares - Alibaba Gr Hldgs (NYSE:BABA), ASML Holding (NASDAQ:ASML)

Chinese technology stocks surged on the Hong Kong Stock Exchange on Wednesday following the U.S. government's decision to lift certain semiconductor export restrictions to China. What Happened: The rally followed Nvidia Corp.'s NVDA announcement on Monday that it would resume H20 GPU sales in China and launch a new RTX PRO graphics chip specifically designed for Chinese customers. CEO Jensen Huang stated the company is submitting applications to restart H20 shipments, with U.S. government assurances that license approvals will be granted. The U.S. had previously imposed broad semiconductor restrictions on China, limiting access to advanced chips from key companies including Nvidia, Taiwan Semiconductor Manufacturing Co. Ltd. TSM, ASML Holding NV ASML, and Micron Technology Inc. MU. These measures, enacted citing national security concerns, aimed to curb China's technological advancement in critical areas. Alibaba co-founder Joe Tsai previously stated that China lagged behind the U.S. by approximately two years in AI development, attributing this gap largely to technology restrictions. The export curbs had limited Chinese firms' access to advanced chips, hampering Alibaba's cloud business and computing services capabilities. See Also: Bank Of America Q2 Earnings Preview: Can Top Warren Buffett Holding Keep Beating Analyst Estimates? Why It Matters: The semiconductor restrictions had a significant financial impact on U.S. companies. Nvidia booked a $4.5 billion charge in its first quarter as a direct result of the H20 export ban to China, which took effect April 9. China's economy expanded 5.2% in the second quarter of 2025, slightly exceeding the 5.1% economists' forecast but representing a deceleration from the first quarter's 5.4% rate. The performance keeps Beijing on track to achieve its 5% full-year growth target. Huang is scheduled to attend China's International Supply Chain Expo opening ceremony in Beijing on Wednesday, where he may meet with top Chinese officials, including Premier Li Qiang and Vice Premier He Lifeng. According to the Financial Times, Nvidia plans to debut a China-specific AI chip as early as September, a modified version of the Blackwell RTX Pro 6000 designed to comply with U.S. export regulations. Read Next: Nvidia Says 'Washington Gets It' After Trump's AI Czar David Sacks Says US Has To 'Outcompete' Global Rivals Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Robert Way / Shutterstock.com ASMLASML Holding NV$821.251.80%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum29.18Growth97.79Quality90.33Value15.30Price TrendShortMediumLongOverviewBABAAlibaba Group Holding Ltd$117.408.48%BIDUBaidu Inc$93.388.75%JDJD.com Inc$32.124.29%MUMicron Technology Inc$119.700.92%NVDANVIDIA Corp$170.203.74%TCEHYTencent Holdings Ltd$66.003.68%TSMTaiwan Semiconductor Manufacturing Co Ltd$236.703.51%XIACYXiaomi Corp$36.600.44%Market News and Data brought to you by Benzinga APIs

Why Alibaba Rallied Today

Shares of Chinese tech giant Alibaba (BABA 8.25%) rallied 8.1% on Tuesday. Alibaba is not only a leader in e-commerce and digital payments but also an artificial intelligence (AI) leader in China. Its open-source model Qwen is thought to be among the best open-source models out there, ranking close to or above the latest DeepSeek on independent scoring boards such as Live Bench. Therefore, Alibaba rose today after AI chip giant Nvidia (NVDA 4.08%) suggested it would be able to recommence shipping its H20 AI chips to China once again after an April ban. Nvidia assured investors it has assurances from the White House Late on Monday, Nvidia wrote on its company blog that "NVIDIA is filing applications to sell the NVIDIA H20 GPU again. The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon." In April, Nvidia was forced to stop shipments of its H20, which is a modified version of its Hopper AI chips to fit the Chinese market, and to apply for a license. Whether that halt had to do with the administration's negotiations with China over trade policy or not is unclear. After all, those trade negotiations are still ongoing. Nevetheless, Nvidia's announcement boosted virtually all Chinese AI companies. Alibaba certainly fits that mold, with its Qwen open-source model being one of the best-performing models in China. Last month, Qwen's latest model leapt to the top of the Hugging Face leaderboard as the highest-performing open-source model today. In addition to Qwen, Alibaba has also invested in an AI start-up named Moonshot. Moonshot just released its Kimi K2 AI model, which Kimi management claims tops the best ChatGPT models from OpenAI and Anthropic's Claude models in the specific task of software coding and at a fraction of the cost. Alibaba should rank among the top of China's AI companies It remains to be seen how China's AI companies will be able to compete against their U.S. counterparts, but that may not matter much in the case of Alibaba's stock, which revolves around its core China e-commerce business. As long as Alibaba has access to top AI chips and talent versus its competitors, it should be able to translate that into revenue and profit growth across its business empire spanning e-commerce, cloud, and digital finance.