Nvidia (NASDAQ:NVDA) remains the global leader in artificial intelligence (AI) chips, but new developments out of China suggest that competition could intensify in the coming years. Huawei Technologies has reportedly doubled down on AI chip production, sending a warning to investors that China is preparing to reduce reliance on U.S. technology. With Nvidia stock 2025 already at record highs, investors are weighing whether Huawei poses a credible threat—or if NVDA’s moat remains unshaken.

Huawei Ramps Up AI Chip Ambitions

According to reports, Huawei plans to nearly double production of its most advanced Ascend 910C AI chips in the coming year. Total output could reach 1.6 million units, including various models, as Chinese firms like Alibaba (NYSE:BABA) and Tencent (OTC:TCEHY) seek domestic solutions to power AI services.

This production surge underscores Beijing’s determination to build a self-sufficient semiconductor ecosystem. In fact, Huawei’s roadmap through 2028 includes the Ascend 950, 960, and 970, each designed for incremental performance improvements. While this trajectory highlights progress, Huawei chips still lag Nvidia’s most advanced offerings by a wide margin.

For investors monitoring Nvidia stock 2025, the critical question is whether Huawei’s advances could meaningfully disrupt Nvidia’s dominance in China—the world’s largest semiconductor market.

Nvidia’s Position in China

Nvidia’s relationship with China remains strained due to U.S. export restrictions. Beijing has discouraged or outright blocked the use of Nvidia’s high-end chips over national security concerns. As a result, Nvidia reported no sales of its H20 series in China during the last quarter and expects zero revenue contribution from the region this quarter.

CEO Jensen Huang has voiced disappointment but acknowledged the broader geopolitical tensions at play. Until there is clarity on trade negotiations between the U.S. and China, Nvidia’s market access remains limited. Still, even if restrictions ease, Huawei and other Chinese chipmakers are quickly positioning themselves to capture market share.

How Huawei Stacks Up Against Nvidia

Despite Huawei’s ambitious plans, its chips are not yet close to Nvidia’s performance benchmarks. The upcoming Ascend 950, for instance, delivers only about 6% of the performance of Nvidia’s next-generation VR200 superchip. Even if Nvidia were forced to sell a scaled-down version in China, its performance advantage would remain significant.

Moreover, Huawei’s semiconductors are primarily used for inferencing tasks, while Nvidia chips power large-scale AI model training. Bloomberg recently noted that Huawei is developing more powerful chips to compete in training, but commercialization is unlikely before 2027. In contrast, Nvidia continues to innovate rapidly, releasing next-generation products that maintain its technological lead.

Another important factor is Nvidia’s ecosystem advantage. Its hardware is tightly integrated with proprietary software, creating what analysts describe as a formidable “moat.” This makes it expensive and inefficient for AI developers to switch platforms once they’ve built models around Nvidia’s CUDA ecosystem. For Nvidia stock 2025, this ecosystem remains a key defensive asset against competitors like Huawei.

Analyst Outlook on Nvidia Stock 2025

Despite geopolitical risks, Wall Street analysts remain overwhelmingly bullish on Nvidia stock. Out of 46 analysts, 39 rate it a “Strong Buy,” while only one has issued a “Strong Sell.” The average price target of $215.51 suggests an upside of more than 15% from current levels.

Nvidia’s fundamentals back up this optimism. Analysts forecast adjusted earnings per share to climb 50.58% year-over-year in fiscal 2026, with revenue expected to jump 58.20% to $206.45 billion. These projections suggest that Nvidia stock 2025 is still on a strong growth trajectory, even without major contributions from China.

Should You Buy Nvidia Stock 2025?

For investors, the answer comes down to balancing short-term headwinds with long-term potential. While Huawei’s expansion highlights growing domestic competition in China, Nvidia maintains a wide technological and ecosystem lead. The geopolitical risks are real, but Nvidia’s dominance in AI training and global demand for its chips provide strong growth momentum.

If you already own Nvidia shares, the best strategy may be to hold and add on pullbacks. For new investors, caution is warranted given current valuations, but opportunities to buy on dips could prove rewarding.

Bottom Line

Huawei’s expansion in AI chips represents a symbolic challenge, but the performance gap and Nvidia’s ecosystem strength suggest limited near-term threat. For now, Nvidia stock 2025 remains one of Wall Street’s top picks, with analysts projecting robust growth well into the future. While China’s ambitions can’t be ignored, Nvidia’s global dominance in AI chips looks secure for the foreseeable future.

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