Nvidia stock set for 15% weekly gain as trade news boosts AI chip
Nvidia (NVDA) stock experienced a significant surge of over 15% in the past five trading sessions, driven by optimism surrounding its expansion in overseas markets. The tech giant recently announced strategic partnerships in Saudi Arabia and the United Arab Emirates, further solidifying its presence in the Middle East. These developments have generated excitement among investors ahead of Nvidia’s upcoming quarterly earnings report on May 28.
On Tuesday, Nvidia revealed a collaboration with Humain, Saudi Arabia’s new AI venture backed by the country’s $925 billion Public Investment Fund. The partnership entails supplying several hundred thousand AI chips to Humain over the next five years, positioning Nvidia as a key player in the region’s burgeoning tech industry. This news coincided with similar deals between Humain and prominent US tech firms like Amazon, AMD, and Qualcomm, underscoring the growing demand for Nvidia’s cutting-edge technology.
Additionally, Bloomberg reported on Tuesday that the Trump administration is considering allowing the United Arab Emirates to purchase Nvidia’s AI chips. President Trump later confirmed this arrangement, which would enable the UAE to import half a million of Nvidia’s prior-generation Hopper AI chips annually. These developments have further bolstered Nvidia’s stock performance, with shares climbing 5.6% on Tuesday and an additional 4% on Wednesday, propelling the stock into positive territory for the year.
CFRA analyst Aaron Siegel expressed optimism about Nvidia’s prospects, citing favorable policy shifts such as relaxed China tariffs and the removal of the AI diffusion rule. The temporary trade truce between the US and China this week also bodes well for Nvidia, as the company derives a significant portion of its revenue from the Chinese market. This positive development, coupled with the easing of trade tensions, contributed to a surge in Big Tech stocks, including Nvidia, on Monday.
Furthermore, reports from the Financial Times and Reuters indicate that Nvidia is exploring the establishment of a research and development center in China. This move aligns with the company’s commitment to innovation and expansion into key global markets. Moreover, the recent decision to revoke the AI diffusion rule, which would have restricted Nvidia’s chip exports, represents another positive development for the company.
Despite facing challenges earlier in the year, including concerns about overspending on AI infrastructure and a potential slowdown in data center investments, Nvidia has demonstrated resilience and adaptability. The company’s strategic partnerships, market expansion initiatives, and favorable policy developments have positioned it for continued growth and success in the dynamic tech landscape.
In conclusion, Nvidia’s recent stock performance reflects the company’s strong fundamentals, strategic vision, and ability to capitalize on emerging opportunities in the global tech sector. As investors await the upcoming earnings report, all eyes are on Nvidia as it continues to drive innovation and shape the future of AI technology.
