Key facts: NVIDIA China Rule; Melius Cuts Target; U.S. Chip Curbs

What happened

NVIDIA will require cloud clients worldwide to sell at least 51% of services outside China, limiting capacity for Chinese customers under future contracts. Melius Research kept its Buy rating on NVIDIA but cut its price target to $315 from $420, citing valuation pressure.

Confirmed

Global impact / market context

The 51% rule limits how much NVIDIA chip capacity cloud providers can reserve for Chinese customers, which could reduce a slice of future sales. Melius still rates the stock a Buy but sees less room for gains, so investors face slower expected upside despite continued demand.

Analyst inference

U.S. curbs aim to block Chinese access to advanced chips, including Blackwell processors, through overseas data centers. Separately, a November filing showed Michael Burry's put options on NVIDIA, which are bets the stock falls, and shares dropped once those positions became public.

Analyst inference

What to watch

1. Watch whether cloud providers sign future contracts meeting the 51% non-China services threshold, since that determines how much NVIDIA capacity remains available to Chinese customers under those deals. Confirmed
2. Watch U.S. Commerce Department guidance and any tightening of curbs on Blackwell chips routed through overseas data centers, because stricter rules could cut NVIDIA's addressable sales. Analyst inference
3. Watch whether major cloud companies reduce AI infrastructure spending, an expert warned NVIDIA's reliance on hyperscaler spending leaves it vulnerable if those buyers cut investment. Analyst inference

Evidence

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