UBS maintains Buy recommendation for NVIDIA Corporation (NVDA) despite concerns about China H200 chips demand

UBS has reiterated its Buy recommendation for NVIDIA Corporation (NVDA), setting a price target of $235, despite concerns about demand for its H200 chips in China. While questions persist over China's focus on domestic AI alternatives, NVIDIA's leadership in AI and data centers remains solid.

NVIDIA Corporation (NASDAQ: NVDA) continues to be one of the top stock picks for billionaire investor David Tepper in 2026. On December 9, UBS analyst Timothy Arcuri reiterated a Buy recommendation for NVIDIA with a price target of $235. This endorsement highlights confidence in the company despite ongoing concerns surrounding the demand for its H200 chips in China.

UBS Upholds Buy Recommendation Despite China H200 Demand Uncertainty

Despite the U.S. government authorizing NVIDIA to sell its H200 chips to Chinese customers, concerns about the actual demand for these chips have arisen. Jefferies analysts have raised questions, pointing to Chinas focus on developing domestic alternatives. The H200 chips, positioned as second-tier AI processors, have less power compared to high-end options. Analysts caution that NVIDIA could face difficulties as China strives for greater self-sufficiency in advanced AI processors. This development coincides with the rapid progress of Chinese AI technologies, as evidenced by the Moonshots Kimi K2 Thinking model, which is now ranked fourth globally in AI performance.

Partnership with Mistral AI to Boost Open Model Development

NVIDIA has formed a partnership with Mistral AI to accelerate the creation of a new generation of Open Models. The Mistral 3 family is specifically optimized for NVIDIA platforms and is designed to deliver distributed AI intelligence from cloud to edge. These models are intended for high efficiency and precision in enterprise AI applications, and they can be deployed across various environments including cloud, data centers, or edge devices. Additionally, the models provide tools for researchers and developers, enabling them to enhance AI experimentation and foster innovation.

NVIDIAs Expanding Role Beyond Gaming

Once primarily known for its gaming-focused graphics processing units (GPUs), NVIDIA has since expanded its influence in several critical technology sectors, including AI, data centers, professional visualization, and the automotive industry. The companys CUDA parallel computing platform, which allows GPUs to handle complex computational tasks beyond graphics, has further solidified its position across multiple sectors. This broadening of its focus has greatly enhanced NVIDIAs role in shaping technological advancements in these fields.

Investment Perspective

Although NVIDIA demonstrates significant growth potential, some analysts suggest that other AI-related stocks may present higher returns with reduced risk. Investors who are looking for undervalued AI opportunities, particularly those that may benefit from trade policies or reshoring trends, might find compelling options outside of NVIDIA. Nonetheless, the company remains a strong contender in the broader AI landscape, despite the challenges posed by the evolving market dynamics.

Sources:

• UBS Asserts Buy Stance on NVIDIA Corporation (NVDA) Despite China H200 Chips Demand
• UBS Analyst Says Approval for H200 Chip Exports Will “Even the Playing Field” for Nvidia (NVDA)
• Nvidia stock may see China export approval for H200 chips, UBS says
• UBS Asserts Buy Stance on NVIDIA Corporation (NVDA) Despite China H200 Chips Demand Concerns