Unlike the benchmark S&P 500 market index, which is up 0.99% year-to-date (YTD), Nvidia (NASDAQ: NVDA) stock is down 0.67% so far in 2026, and recent developments from China might be to blame.
Specifically, one of the bullish catalysts for the semiconductor giant at the tail-end of 2025 has been the expected loosening of restrictions on the export of advanced chips to the East Asian country.
In a surprising January 14 twist, however, it turned out that China might be too keen on purchasing Nvidia’s H200 series. Indeed, the People’s Republic’s customs authority reportedly informed the blue-chip chipmaker that H200 imports are essentially forbidden from the country.
Why China’s soft ban could herald a 2026 Nvidia stock price crash
The move echoes reported instructions issued by Beijing that companies within the country are only to buy the semiconductor giant’s products if genuinely necessary.
Given that China is the world’s second-biggest economy in nominal terms, and the biggest if the so-called purchasing power parity (PPP) is accounted for, the move represents a hit for Nvidia’s potential 2026 revenue.
Considering how much of NVDA stock’s valuation is dependent on the expectations for future growth, the news from East Asia could have easily dampened investor enthusiasm.
Perhaps even more concerning than the impact on short and mid-term sales is the fact that China’s attitude toward American industry and corporations is akin to the U.S. toward Britain two centuries ago – it utilizes the technology and methods of the more advanced nation in order to catch up.
Under the circumstances, China’s alleged decision pertaining to H200 chips could signal that its domestic companies are approaching parity with Nvidia, indicating powerful competitors could soon challenge the dominance of the world’s largest firm by market capitalization.
Why China might have no bearing on the 2026 Nvidia stock price
Historically, however, the comings and goings in China have only had a limited impact on Nvidia’s stock market performance. For example, the previous restrictions on imports to the East Asian country have done little to stem NVDA shares’ overall 35.91% rally in the last 12 months.
Thus, it is possible that the alleged new import soft ban has either no impact on Nvidia stock or only a short-term impact. Even before the news broke out, NVDA had struggled to maintain its sky-high valuation, notably crossing above a $5 trillion market cap in October 2025, only to significantly retrace since.
Elsewhere, the latest slump could be attributed to Nvidia alienating a part of its long-standing core audience – PC gamers – by downscaling production of consumer chips and focusing fully on artificial intelligence (AI) products aimed primarily at corporate clients.
Lastly and despite the early 2026 downturn, it is worth noting that NVDA stock’s performance in the longer time frames is still nothing short of outstanding.
NVDA remains a top-performing stock despite 2026 downturn
With their January 15 press time price of $185.16, Nvidia shares are 35.91% up in the last 12 months and an even more incredible 1,324% in the green in the last five years.
Similarly, the long-term prospects for the company remain rosy with demand for Nvidia’s previous most advanced Blackwell infrastructure reportedly being immense, and with the interest in the upcoming Vera Rubin series being expected to be similarly high, if not higher.
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