Nvidia's China Chip Deal Signals New Tailwind For Chip And AI ETFs

Author: Chandrima Sanyal | July 15, 2025 11:25am

Nvidia (NASDAQ:NVDA) stocks jumped over 4% in Monday trading after investors rushed in on word that the company may once again be able to sell its high-powered H20 AI chips to China. The U.S. government is reportedly set to issue licenses enabling Nvidia to ship billions of dollars’ worth of GPUs to Chinese technology behemoths such as ByteDance and Tencent (OTCPK: TCEHY), potentially restoring up to $20 billion in lost revenue, according to Reuters.

Also Read: Nvidia Growth Estimates Get 10% Boost As US Lifts China Chip Export Curbs: Gene Munster Predicts 30-35% Growth For 2026

For retail investors, this isn’t so much about the one stock; it’s about what’s going to happen to the ETFs that contain Nvidia in terms of their size. And a few of them are already up.

The ETFs Riding Nvidia’s Rally

• VanEck Semiconductor ETF (NASDAQ:SMH): One of the most popular chip-exposure plays, SMH features Nvidia as its leading holding, at more than 21% of the fund. If you’re looking for a diversified semi-basket that continues to benefit from Nvidia’s AI dominance, this is a favorite selection. SMH is up more than 2% on Tuesday, tracking Nvidia’s action.

• iShares Semiconductor ETF (NASDAQ:SOXX): Another heavyweight, SOXX provides more diversified exposure among chipmakers, but Nvidia still looms large (at about 8%). It’s the go-to choice for long-term investors seeking to capitalize on AI and next-gen tech themes without putting it all on a single name. The fund price gained around 1.5% on Tuesday.

• Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ): Although not a true semiconductor fund, BOTZ rides the broader AI mania that Nvidia fuels. The fund owns Nvidia and other firms constructing the AI infrastructure—consider automation, robotics, and machine learning infrastructure.

• Direxion Daily NVDA Bull 1.5x Shares (NASDAQ:NVDU) and GraniteShares 1.5x Long NVDA Daily ETF (NASDAQ:NVDL): For those who want to supercharge Nvidia’s daily moves, they can provide turbocharged exposure. Obviously, they are up almost 9% today, mirroring Nvidia’s gains by two. Warning: They are designed for short-term trading, not long-term investment.

Why China Matters

Nvidia’s H20 chip was specifically tailored to meet U.S. export controls, but it was still affected by an April embargo that compelled the company to take a $5.5 billion write-down in inventory. Now that CEO Jensen Huang has returned to Beijing and China relaxes its approach to technology exports, Nvidia appears to be poised for a significant comeback in one of its most critical markets.

If licenses are approved shortly, according to analysts, Nvidia would be able to regain $15–$20 billion in revenue, money that would be reflected through the aforementioned ETFs.

Whether you’re buying into Nvidia itself or through ETFs, today’s rally demonstrates how international politics, AI demand, and chip supply chains are all coming together in one of the market’s largest names. For those invested in ETFs, the message is straightforward: where Nvidia goes, funds follow.

Read Next:

• Chinese Stocks See Broad Rally As US Eases Chip Curbs

Photo: Shutterstock

Posted In: BOTZ NVDA NVDL NVDU SMH SOXX TCEHY