Nvidia (NVDA) shares are back in rally mode, climbing sharply this week as investors cheered signs of renewed demand for its AI chips—driven in part by a major geopolitical development.
President Donald Trump’s emerging AI tech diplomacy, particularly a proposed chip technology partnership with the United Arab Emirates, has reignited bullish sentiment around the semiconductor giant.
Nvidia Roars Back After Brief Slump
After facing brief selling pressure last week, Nvidia stock bounced back with force. This week, NVDA surged over 4% to reclaim the $130 level as investors reacted positively to two catalysts:
- Cooling inflation data, which hinted at a potential pause in Federal Reserve interest rate hikes.
- New optimism about global AI chip demand, fueled by Trump’s trade and tech strategy with foreign allies.
The stock’s rebound came after a modest 5% pullback earlier this month. Now, bulls are pointing to renewed momentum, especially if broader market conditions remain favorable.
Trump’s UAE Chip Deal: A Game-Changer?
According to reports from Barron’s and Yahoo Finance, President Trump is finalizing an ambitious agreement that would allow Nvidia’s high-performance AI chips to be exported to the UAE and other allied nations. This move could potentially sidestep existing export restrictions on U.S. semiconductor technology—especially those imposed during the Biden administration.
Here’s what’s at stake:
- The deal would expand Nvidia’s global footprint in AI data centers.
- The UAE has committed to building sovereign AI infrastructure, which would rely heavily on Nvidia hardware.
- Trump’s administration reportedly views the deal as both an economic and strategic counterbalance to China’s AI ambitions.
While no formal agreement has been signed yet, Wall Street is already pricing in the potential upside.
Market Momentum: Broader Tailwinds Lift Tech
Nvidia isn’t the only name getting a lift. The broader tech sector surged as inflation data from the U.S. Labor Department showed that consumer prices rose just 0.3% in April—lower than expected.
This sparked a market-wide rally:
- S&P 500 climbed above 5,300, hitting new record highs.
- Nasdaq rose nearly 1%, led by semiconductor and AI-related stocks.
- Dow Jones also gained, supported by strong earnings from major industrial names.
Traders now expect the Fed may hold off on additional rate hikes—good news for growth stocks like Nvidia, which are sensitive to interest rate changes.
Analyst Outlook: Can Nvidia Hit $150?
The rebound in NVDA stock has reignited debate over its near-term price ceiling. Analysts remain bullish:
- Many expect Nvidia to test the $150 level in the coming weeks.
- Demand for AI chips remains strong, and the company has shown consistent earnings growth quarter over quarter.
- Trump’s UAE deal could unlock a wave of international orders for Nvidia’s most advanced chips.
Applied Materials (AMAT), another semiconductor stock, also reported strong results—further boosting confidence in the chip sector.
Bottom Line for NVIDIA
Nvidia is once again leading the charge in the AI arms race, with political tailwinds and international demand putting the stock back on investors’ radars.
If Trump’s UAE deal materializes and inflation continues to cool, NVDA could be well-positioned to break the $150 barrier and set new records.