Nvidia (NVDA) shares jumped 5.6% on Tuesday, pushing the company’s market value to $3.17 trillion, its first time crossing the $3 trillion mark since February. The rally followed major AI chip deals announced during a high-profile investment forum in Saudi Arabia, attended by Nvidia CEO Jensen Huang, President Trump, and other tech leaders.
Key Developments Driving the Rally
Nvidia will ship AI chips to Saudi Arabia’s new startup Humain, which is building massive data centers with U.S. support.
A Bloomberg report revealed a potential Trump administration deal to allow the UAE to purchase over 1 million Nvidia AI chips.
Wedbush analyst Dan Ives noted the deals prove that AI chip demand extends beyond China.
Trump Trade Moves Spark Tech Optimism
The rally also benefited from Trump’s unexpected decision to lower tariffs on Chinese imports from 145% to 30% for 90 days, signaling a temporary de-escalation in the U.S.-China trade war. The move boosted the broader tech sector, particularly the “Big Seven” stocks.
Nvidia: Caught in Trade Policy Crossfire
Trump’s policies are a double-edged sword for Nvidia:
On one hand, the repeal of the Biden-era “AI proliferation rule” could allow Nvidia to resume chip exports to many countries previously restricted.
On the other hand, U.S. bans on AI chip exports to China, especially the H20 version of Nvidia’s Hopper chips, could cost the company up to $16 billion this fiscal year, according to JPMorgan analyst Harlan Sur.
Rising Competition from China
The pressure is mounting as Huawei begins rolling out its own AI chips, while startups like China’s DeepSeek are offering cheaper AI models, sparking concerns over the sustainability of massive U.S. tech infrastructure spending on Nvidia’s high-end chips.
AI Investment Frenzy Keeps Nvidia Afloat
Despite macroeconomic uncertainty, big tech is still doubling down on AI:
Microsoft confirmed an $80 billion commitment to AI data center infrastructure.
Meta raised its 2025 capital expenditure forecast to $72 billion, boosting sentiment around AI chip demand.
These announcements helped Nvidia recover from a rough start to 2025, during which its stock fell over 3%, underperforming the S&P 500. In contrast, Nvidia soared over 170% in 2024, far outpacing the S&P 500’s 23% gain.
Looking Ahead
Nvidia will report its Q1 FY2026 earnings on May 28, which could offer further insight into:
The financial impact of export bans and Middle East partnerships.
How the AI chip demand story evolves outside China.
The sustainability of tech giants’ AI spending.
This week’s surge underscores investor confidence that Nvidia will remain central to the global AI race, even amid policy swings, foreign competition, and growing skepticism about the economics of AI megaprojects.
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