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.
Image source: Morris/Bloomberg via Getty Images
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.
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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.
In a note published on April 28, Windsor laid out exactly why he believes Nvidia won’t be severely impacted, even if Huawei can produce AI chips that appeal to domestic buyers in the Chinese market.
“While this is not going to hurt the prospects for Chinese AI in China, it is the rest of the world that will determine whether U.S. attempts to isolate China are successful,” he states. “Here, I see a substantial disadvantage for Chinese AI when trying to win hearts and minds outside of China, as it will be both more expensive and come with the usual strings attached.”
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For that reason, he doesn’t see a future in which Nvidia and Huawei are competing directly outside of China. This leads him to conclude that any concern among investors over the former losing a substantial part of its market share is likely overblown.
Competition is rising in the AI market, but Windsor isn’t worried
Huawei’s new AI chip is slated for release later in 2025, and when it makes its debut, NVDA stock could easily dip on the news. However, Huawei has released other Ascend chips in previous years, and Nvidia hasn’t been severely compromised.
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For that reason, Windsor believes that Nvidia can recover from its current state and continue to thrive in the current AI market, even as it becomes increasingly crowded. No chipmaker has been able to dethrone it so far, and Nvidia is as focused as ever on expanding into areas such as robotics and supercomputer manufacturing.
“The only real threat that I see to Nvidia here is in China, where the state’s control over the private sector may ensure a switch away from Nvidia’s CUDA, with developers learning how to use Huawei’s development platforms instead,” Windsor states.
Compute Unified Device Architecture (CUDA) refers to a parallel computing platform created by Nvidia that lets developers accelerate their general-purpose computing by harnessing GPUs.
The analyst notes that such a scenario could impact Nvidia, as China accounts for a significant portion of its revenue. But, he adds, “What Nvidia loses from one hand it may gain with the other,” as China isn’t likely to rival it in international markets.
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