Nvidia (NVDA) stock soared 16% over the past five trading days, driven by exciting new trade agreements and optimism around its expanding AI chip business in the Middle East. The surge comes just ahead of Nvidia’s highly anticipated quarterly earnings report scheduled for May 28, 2025.
Nvidia Expands AI Chip Supply Agreements with Saudi Arabia and UAE
On Tuesday, Nvidia announced a major deal with Saudi Arabia’s AI venture Humain, backed by the kingdom’s $925 billion Public Investment Fund. The agreement will see Nvidia supply several hundred thousand AI chips over the next five years, bolstering its international growth in AI hardware.
In addition, Bloomberg reported that the Trump administration may finalize a trade deal enabling the United Arab Emirates to import Nvidia’s AI chips. This was confirmed on Friday, with the U.S. government approving the sale of 500,000 prior-generation Hopper AI chips annually to the UAE, marking a significant expansion for Nvidia’s global AI chip market.
Market Reaction and Analyst Outlook on Nvidia Stock
Nvidia shares jumped 5.6% on Tuesday and continued climbing 4% on Wednesday, reaching new highs and turning positive for the year. Though Friday’s gains were more modest at 0.4%, the overall weekly performance reflects strong investor confidence.
CFRA analyst Aaron Siegel highlighted recent positive policy changes—such as eased China tariffs and the removal of restrictive AI export rules—that have improved Nvidia’s outlook. “Favorable policy shifts have boosted our sentiment on NVDA, although uncertainties remain around ongoing semiconductor trade investigations,” Siegel noted.
Trade Truce with China and R&D Plans Boost Nvidia Growth Prospects
A recent temporary trade truce between the U.S. and China positively impacted Nvidia, as approximately 13% of the company’s revenue stems from China and Hong Kong markets. This de-escalation also lifted other Big Tech stocks, further enhancing Nvidia’s momentum.
In a related development, Nvidia is reportedly planning to open a new research and development center in China, positioning itself to deepen innovation in AI chip technology and maintain a competitive edge in the semiconductor industry.
AI Diffusion Rule Repeal and Continued Investment Drive Nvidia’s Momentum
Another boost came from the Trump administration’s decision to scrap the AI diffusion rule enacted under the Biden administration, which had restricted Nvidia’s chip exports to many countries. This regulatory relief clears a major hurdle for Nvidia’s international sales.
Despite concerns early in 2025 about a potential slowdown in AI infrastructure spending, Nvidia’s core customers like Microsoft have reaffirmed strong capital expenditure plans—$80 billion in AI-driven investments this year. Meta also increased its AI budget to $72 billion, signaling sustained demand for Nvidia’s advanced AI chips.
