Nvidia (NVDA) stock surged 5.6% on Tuesday, pushing the company’s market capitalization to close above $3 trillion for the first time since February as a wave of trade news bolstered prospects for the AI chip giant.
Nvidia CEO Jensen Huang said Tuesday during an investment forum in Saudi Arabia — which was attended by President Trump and other Big Tech CEOs — that the AI chipmaker will ship its chips to Saudi Arabian AI company Humain for its massive data center plans.
Also on Tuesday, a report from Bloomberg also indicated the Trump administration may cut a deal that would allow the United Arab Emirates to purchase “more than a million” of Nvidia’s AI chips.
Wedbush analyst Dan Ives told Yahoo Finance Tuesday these deals show the AI chip demand story is “not just about China.”
Nvidia is set to report its first quarter earnings for its fiscal year 2026 on May 28.
Read more about Nvidia’s stock moves and today’s market action
Nvidia’s rally Tuesday follows Monday’s gain that was part of a larger surge in the “Magnificent Seven” Big Tech stocks after the Trump administration temporarily slashed tariffs on Chinese imports to 30% from as high as 145% for 90 days, signaling a deescalation in the mounting US-China trade war.
Nvidia, Apple (AAPL), and Microsoft (MSFT) have taken turns as the world’s most valuable company over the past year. But Nvidia has fallen behind, failing to notch the No. 1 spot since January.
The AI chipmaker has also underperformed the S&P 500 (^GSPC) so far in 2025 for the first time in years as macroeconomic uncertainty due to Trump’s trade war and growing scrutiny of Big Tech’s AI investments put shares under pressure.
Trump’s trade policies have both helped and hurt Nvidia.
The administration has implemented an effective ban on sales of Nvidia’s chips for China, a version of its prior-generation Hopper AI GPUs called H20 tailored to comply with US trade restrictions. JPMorgan (JPM) analyst Harlan Sur projected that, overall, Nvidia will lose as much as $16 billion in the current fiscal year from the H20 ban.
The ban comes just as competition ramps up from Chinese tech firm Huawei, which is reportedly poised to begin shipping chips competitive with Nvidia’s older Hopper chips.
At the same time, the Trump administration has said it’s scrapping a more sweeping Biden-era policy, the so-called AI diffusion rule, that was set to limit exports of Nvidia AI chips to most countries beginning in May.
The consequent push-and-pull effect on Nvidia shares from the trade rule changes in April came after the AI chip stock suffered a massive blow to start 2025 when a cheap AI model from Chinese startup DeepSeek prompted questions in January over whether US tech firms really need to spend hundreds of billions on AI infrastructure (including Nvidia’s chips).
At the same time, AI stocks as a whole have come under greater scrutiny as investors closely watch Big Tech’s monetization of the technology relative to its mammoth investments.
For now, tech firms’ spending spree on AI infrastructure continues: Meta (META) and Microsoft reaffirmed their aggressive AI investment plans in their most recent quarterly earnings reports, sending Nvidia stock upward. Microsoft reiterated its $80 billion spending plan to build out AI data centers, and Meta raised its capital expenditure outlook for 2025 as high as $72 billion.
Nvidia’s gain Tuesday put its market capitalization at $3.17 trillion, but shares are still down more than 3% in 2025, while the S&P 500 (^GSPC) flipped just back into positive territory for the year. In 2024, the AI chipmaker’s stock price surged over 170% while the index gained roughly 23%.
The last year Nvidia shares underperformed the broader market index was 2022.
Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @laurabratton.bsky.social. Email her at laura.bratton@yahooinc.com.
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