Chinese Tech Giants Ramp Huawei 950PR Orders, Pressuring Nvidia's China AI Chip Sales
Major Chinese internet firms are stockpiling Huawei's Ascend 950PR chips after DeepSeek V4 release, threatening Nvidia's H20 sales as H200 deliveries remain stalled; concurrently Nvidia's forward P/E of 25x implies nearly 100% EPS growth this year, coupled with ongoing AI rack innovations via Nanya and Foxconn partnerships.
1. Chinese Firms Secure Huawei's Ascend 950PR Chips
ByteDance, Tencent and Alibaba have initiated purchase orders for Huawei's Ascend 950PR AI chips following DeepSeek V4's launch optimized for the 950PR. Cloud and GPU rental providers are also placing orders, reflecting strong uptake of the 950PR's compressed numerical processing capability over Nvidia's H20 in the domestic market.
2. Implications for Nvidia's China Market
Huawei's 950PR gains traction as the H200 processor, though approved, remains undelivered due to unresolved export conditions, leaving Nvidia reliant on its lower-tier H20 chip in China. The shift highlights growing domestic competition and potential pressure on Nvidia's regional hardware revenue.
3. Nvidia's Valuation Reflects Robust Growth Forecasts
Nvidia's forward P/E of 25x anticipates nearly 100% EPS growth this year, compared with a trailing P/E of 42x, while analysts project 31% revenue growth next year. This valuation debate underscores investor confidence in prolonged AI infrastructure expansions despite stretched multiples.
4. AI Infrastructure Partnerships with Nanya and Foxconn
Nvidia has partnered with Nanya to integrate LPDDR memory equivalent to 4,500 smartphones per rack, boosting AI server density in its DGX and HGX systems. Collaboration with Foxconn on LPX cabinets further streamlines supply and assembly for inference-era deployments worldwide.