Nvidia Stock Rises 16% on Trade News, AI Chip Demand

Nvidia Surges on Optimism Around Overseas Deals and Trade Policy Shifts

Nvidia (NVDA) stock soared 16% over the week ending Friday, fueled by positive trade developments and significant overseas contracts. The AI chipmaker’s shares rallied on news of expanded business commitments in Saudi Arabia and the United Arab Emirates (UAE), setting a strong tone ahead of its quarterly earnings report scheduled for May 28.

Highlights:

• Nvidia stock jumped 16% over five trading sessions.

• Strong overseas deals in Saudi Arabia and UAE boosted investor confidence.

• Nvidia’s quarterly earnings report is expected on May 28.

Major Overseas Agreements with Saudi Arabia and UAE

On Tuesday, Nvidia announced a multi-year agreement with Saudi Arabia’s AI venture Humain, which is backed by the country’s $925 billion Public Investment Fund. Nvidia committed to supplying several hundred thousand AI chips over the next five years. This deal is part of a broader flurry of partnerships involving US tech giants and chipmakers with Saudi Arabia’s AI ambitions.

In parallel, the Trump administration cleared a major trade hurdle allowing the UAE to import up to 500,000 of Nvidia’s prior-generation Hopper AI chips annually. This move, officially announced by Trump on Friday, opened a significant market for Nvidia’s AI technology in the Middle East.

Highlights:

• Nvidia will supply hundreds of thousands of AI chips to Saudi Arabia’s Humain over 5 years.

• US trade approval enables UAE to import half a million Hopper AI chips yearly.

• Agreements highlight Nvidia’s expanding footprint in key international markets.

Positive Impact of Trade Truce and Regulatory Changes

Nvidia’s outlook has improved due to recent policy shifts including eased China tariffs and the removal of the Biden-era AI diffusion export rule. The US-China temporary trade truce further buoyed Nvidia and other Big Tech stocks, easing investor concerns about geopolitical risks.

China remains a vital market for Nvidia, accounting for 13% of its revenue in the fiscal year ending January 2025. Nvidia is reportedly planning to open a research and development center in China, signaling commitment to this crucial market despite ongoing trade tensions.

Highlights:

• US-China trade truce reduces tariffs and regulatory hurdles.

• Biden-era AI export restrictions scrapped by Trump administration.

• Nvidia plans to open an R&D center in China to strengthen presence.

• China accounted for 13% of Nvidia’s revenue in fiscal 2025.

AI Spending Outlook Remains Robust Despite Early 2025 Concerns

Nvidia’s stock had a slow start to 2025, as skepticism grew over AI infrastructure spending after a cheaper AI model by Chinese startup DeepSeek raised doubts about Big Tech’s massive investments. Concerns about a potential slowdown in AI data center spending, especially from Microsoft (a major Nvidia customer), added pressure.

However, Nvidia’s current momentum reflects continued strong capital expenditure commitments from major customers. Microsoft confirmed $80 billion in AI-driven spending for 2025, while Meta recently boosted its AI investment plans to as much as $72 billion. These substantial expenditures underline persistent demand for Nvidia’s AI chips.

Highlights:

• Early 2025 saw investor skepticism on AI spending due to new low-cost AI models.

• Microsoft confirmed $80 billion in AI capital expenditures for 2025.

• Meta increased AI investments up to $72 billion, supporting Nvidia demand.

• No signs yet of a slowdown in spending on Nvidia chips.

Nvidia Stock Performance Summary

Nvidia shares climbed 5.6% on Tuesday and 4% on Wednesday, lifting the stock into positive territory for the year. The rally slowed with a less than 1% gain on Friday, closing at $135.40. After-hours trading saw a decline of 2.44%.

Highlights:

• Nvidia stock rose steadily midweek, reaching positive YTD returns.

• Closed Friday at $135.40, with slight pullback in after-hours trading.