Nvidia (NVDA) Will "Walk Away" From China, Strategist Says

Nvidia's (NVDA) business in China has been largely eliminated by America's export restrictions, Morningstar Equity Strategist Brian Colello told Yahoo Finance recently.

As a result, the giant chip maker is likely to completely abandon the world's second-largest economy, he stated.

The Last Straw

Washington 's decision to prevent Nvidia (NVDA) from selling its H20 chip in China "was probably the final straw" for NVDA's ability to market "halfway decent chips" in the country, Colello said.

As a consequence, he believes that China-based Huawei can now sell higher-quality chips than NVDA in China or will soon be able to do so.

The Silver Lining for NVDA

 The percentage of revenue that Nvidia (NVDA) obtains from China has already dropped, Colello said. Moreover, the company can still grow significantly even though it will only focus on the U.S. and Europe going forward, he said.

The Recent Price Action of NVDA Stock

  In the last month, the shares have lost 3.5%, while they have retreated 14% in the last three months.

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Disclosure: None. This article is originally published at Insider Monkey