Alibaba Group Holding Limited (NYSE:BABA) and other Chinese tech firms are accelerating a shift toward domestic AI chips as U.S. restrictions on Nvidia Corp. (NASDAQ:NVDA) reshape the competitive landscape and boost Huawei's position.

Alibaba, ByteDance Drive Huawei Chip Momentum

Alibaba and ByteDance are preparing to order Huawei's latest AI chips after customer testing delivered strong results, marking a shift from earlier hesitation around Huawei's Ascend 910C, Reuters reported on Friday, citing sources familiar with the matter. The improved reception signals growing acceptance of domestic alternatives among China's largest tech players.

Compatibility Gains Strengthen Huawei's Position

Huawei is gaining traction with its new 950PR chip due to improved compatibility with Nvidia's CUDA ecosystem and faster performance. The company began sending samples in January and plans to start mass production soon, targeting around 750,000 units in 2026, with broader shipments expected in the second half of the year.

Nvidia Curbs And Domestic Push Reshape Market

U.S. restrictions on advanced Nvidia chips are creating an opening for Huawei and other local players, while China accelerates efforts to build its own semiconductor capacity.

Companies such as Semiconductor Manufacturing International Corporation and Hua Hong Semiconductor Limited are expanding advanced chip production, aiming to significantly increase output despite equipment constraints.

At the same time, JPMorgan analyst Harlan Sur said Nvidia still holds significant upside if export approvals improve, estimating that every 100,000 H200 GPUs shipped to China could generate about $3 billion in revenue. He noted that case-by-case approvals could reopen the market, with strong Chinese demand ready to convert into revenue if restrictions ease.

Technical Analysis

Nvidia is trading 4.2% below its 20-day simple moving average (SMA) and 6.7% below its 100-day SMA, keeping the intermediate trend under pressure even as the stock tries to firm up.

Shares are up 53.67% over the past 12 months, and the stock is closer to its 52-week lows than its highs, trading in the $86.62 to $212.19 range.

The RSI is at 39.02, which sits in neutral territory but closer to the "washed-out" side of the range than to overbought conditions. Meanwhile, MACD is at -2.7707 and remains below its signal line at -1.9507, reinforcing bearish momentum.

The combination of an RSI below 50 and a bearish MACD suggests mixed momentum, with downside pressure still outweighing the early bounce.

  • Key Resistance: $194.00
  • Key Support: $170.50

Earnings & Analyst Outlook

Looking further out, the next major catalyst for the stock arrives with the May 27, 2026 (estimated) earnings report.

  • EPS Estimate: $1.74 (Up from 96 cents YoY)
  • Revenue Estimate: $78.71 Billion (Up from $44.06 Billion YoY)
  • Valuation: P/E of 34.9x (Indicates premium valuation relative to peers)

Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $281.04. Recent analyst moves include:

  • Rosenblatt: Buy (Maintains Target to $325.00) (Mar. 23)
  • Cantor Fitzgerald: Overweight (Maintains Target to $300.00) (Mar. 23)
  • Raymond James: Strong Buy (Raises Target to $323.00) (Mar. 19)

Top ETF Exposure

  • Amplify CWP Growth & Income ETF (NYSE:QDVO): 9.73% Weight
  • REX AI Equity Premium Income ETF (NASDAQ:AIPI): 9.97% Weight
  • Xtrackers Net Zero Pathway Paris Aligned U.S. Equity ETF (NYSE:USNZ): 9.58% Weight

Significance: Because NVDA carries such a heavy weight in these funds, any significant inflows or outflows will likely trigger automatic buying or selling of the stock.

Price Action

NVDA Price Action: Nvidia shares were up 0.55% at $172.18 during premarket trading on Friday, according to Benzinga Pro data.

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