Nvidia's China Revenue 'Is Far From Gone', But It Outmaneuvered US For Rare Earth In Exchange For AI Chips, Says Craig Shapiro
China has leveraged its dominance over rare earth elements to secure eased U.S. export controls on Nvidia Corp. (NASDAQ:NVDA) chips; however, this expert says that the world isn’t decoupling, it is just bartering.
Check out the current price of NVDA stock here.
What Happened: Economist Craig Shapiro, in a detailed X thread, declared, “China just outmaneuvered the U.S. — again. Rare earths for AI chips,” unveiling a backchannel deal that prioritizes resource barter over ideological standoffs.
The agreement, finalized after Donald Trump and Xi Jinping‘s call and London trade talks, saw China fast-track rare earth export licenses, including dysprosium and terbium, under a six-month “green channel.”
In return, the U.S. relaxed restrictions on AI semiconductors and EDA software, allowing Nvidia and Advanced Micro Devices Inc. (NASDAQ:AMD) to resume exports of modified chips to China.
Shapiro noted, “Nvidia's China revenue is far from gone,” signaling the tech giant's continued market presence despite earlier curbs.
Reuters and Bloomberg confirm military-grade restrictions remain, but civilian-use materials are back in play, reflecting a calculated trade-off.
Shapiro's analysis frames this as “classic realpolitik,” with China acting “like a central banker for the physical world. Not through money, but through minerals.”
He concludes, “The world is not decoupling. It's just bartering,” highlighting strategic interdependence. Investors are urged to monitor rare earth exposure and export control trends, as this deal reshapes global tech and mineral dynamics.
Why It Matters: The U.S. lifting restrictions on chip exports to China has also altered Nvidia’s growth expectations, which were set back after its first quarter earnings, assuming a hit from H20 chip’s excess inventory and purchase obligations.
Gene Munster said, “That means that Street estimates should rise by about 10% on the news,” adding that "Either way you look at it. Great news for $NVDA."
He also said that the company's 2026 growth estimates could rise from the current 25% to 30-35% growth.
Price Action: Nvidia shares rose 4.04% on Tuesday. The stock has advanced 23.42% on a year-to-date basis and 35.09% over a year.
Benzinga Edge Stock Rankings shows that NVDA had a stronger price trend over the short, medium, and long term. Its momentum ranking was solid, whereas its value ranking was poor; the details of all the metrics are available here.
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, ended mixed on Tuesday. The SPY was down 0.43% at $622.14, while the QQQ advanced 0.092% to $556.72, according to Benzinga Pro data.
On Wednesday, the futures of the S&P 500, Dow Jones, and Nasdaq 100 indices were trading lower.
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