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Nvidia Stock Surges as AI Boom Overpowers China Trade Bans
Nvidia stock rose nearly 1% in premarket trading on Wednesday, as investors set their sights on the company’s record closing price of $149.43. This rebound marks a significant turnaround for the first half of the year, following a turbulent start tied to geopolitical tensions and regulatory hurdles.
The AI chipmaker attracted renewed investor interest after reporting better-than-expected Q1 revenue results in late May. Shares have jumped over 9% since the May 28 earnings report, greatly outperforming the S&P 500’s ~3.5% gain in the same period. This rally highlights Nvidia’s resilience and market relevance.
Despite a new U.S. export ban targeting its sales to China, Nvidia showcased continued revenue growth and robust demand for its advanced chips.
Export Ban to China Slows Momentum – But Not for Long
In April, the U.S. imposed additional export restrictions, blocking Nvidia from selling its powerful H20 AI chips to China. Analysts estimate this cost the company approximately $2.5 billion in Q1 revenue and projected a further $8 billion loss in Q2.
Despite these headwinds, Nvidia’s strategic moves — including partnerships forged earlier in May with Saudi Arabia and the United Arab Emirates — stabilized its position. The deal to supply hundreds of thousands of AI chips secured critical new markets and bolstered investor confidence.
China’s Competition and Market Pullbacks
January and April saw Nvidia stock under pressure from two main challenges:
- A cheap AI model from Chinese competitor DeepSeek triggered concerns about weakening chip demand.
- A spate of U.S. tariff threats and geopolitical uncertainty rattled broader markets, briefly pushing NVDA to its lowest close since before its January all-time high.
Notably, the stock bottomed out at just over $94 on April 4, marking its lowest closing price in more than a year.
Tech Tank Reversal: Chip Stocks Lead the Charge
The recent Nvidia rally has had broader effects on the sector. On Tuesday, fellow semiconductor giants Intel (INTC), AMD (AMD), and Broadcom (AVGO) each climbed more than 3.5%, mirroring the broader recovery in chip stocks.
The resurgence comes as investors renew confidence in tech. According to Bank of America analysts, net inflows into tech stocks hit their highest level since June 2024, signaling renewed capital interest in the sector.
Market Indices Hit New Highs
On the same day, U.S. stock indices backed up the tech momentum. The Nasdaq 100 (^NDX) closed at a record high, while the broader Nasdaq Composite (^IXIC) reached its highest level since February 2025—a sign that optimism in technology and growth stocks remains strong among institutional investors.
Can Nvidia Sustain the Momentum?
Nvidia’s path forward hinges on several factors:
- Maintaining momentum toward breaking the record close of $149.43, set on a busy January trading day.
- Navigating further export restrictions or geopolitical escalations, particularly those affecting China.
- Solidifying chip supply deals with new markets like the Middle East, while defending its position against Chinese challengers such as DeepSeek and Huawei.
- Leveraging continued capital inflows into tech, a trend underscored by recent moves in Nasdaq and S&P 500 components.
Investor confidence in Nvidia’s long-term growth remains firm, with many analysts highlighting the company’s dominance in AI infrastructure as a key catalyst. As the second quarter approaches, market participants are closely watching for updated guidance on international sales, especially amid ongoing geopolitical tensions and competition from Chinese tech firms. With Nvidia maintaining partnerships in the Middle East and continuing to supply high-performance GPUs globally, many believe the stock’s upward trajectory could extend well into the second half of 2025 — provided macroeconomic conditions remain favorable.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
