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Nvidia (NVDA) stock was on track to jump more than 15% over the five trading sessions ending Friday. The reason: optimism for its overseas business, specifically deals announced to expand its business in Saudi Arabia and the United Arab Emirates. This comes ahead of its quarterly earnings report on May 28.
On Tuesday, Nvidia unveiled a commitment with Saudi Arabia's new AI venture Humain — which is owned by Saudi Arabia's $925 billion Public Investment Fund — to supply it with several hundred thousand AI chips over the next five years. The news came amid a flurry of deals between Humain and US Big Tech firms and chipmakers, such as Amazon (AMZN), Advanced Micro Devices (AMD), and Qualcomm (QCOM).
Also on Tuesday, a report from Bloomberg indicated the Trump administration may cut a deal that would allow the United Arab Emirates to purchase Nvidia's AI chips. Trump officially announced a deal on Friday that would allow the country to import half a million of Nvidia's prior-generation Hopper AI chips per year, according to CNBC.
Read more about Nvidia's stock moves and today's market action.
Nvidia stock jumped 5.6% on Tuesday and another 4% on Wednesday, putting shares into positive territory for the year. Shares traded slightly down on early Friday.
CFRA analyst Aaron Siegel said on Wednesday: "Our outlook on NVDA has considerably improved [in] recent weeks with favorable policy shifts, including more lenient China tariffs and the scrapping of the AI diffusion rule, though uncertainty remains around the 232 semiconductor investigation."
The US this week announced a temporary trade truce with China. This was a positive sign for Nvidia, which saw 13% of its revenue come from China (including Hong Kong) during the year ended Jan. 26, according to Bloomberg data. The deescalation also sent Big Tech stocks, including Nvidia, soaring on Monday.
Meanwhile, the Financial Times and Reuters said Nvidia is looking to open a research and development center in China, which a person familiar with the matter confirmed in an email to Yahoo Finance.
More good news: Trump scrapped the so-called AI diffusion rule passed by former President Biden, which would have limited exports of Nvidia chips to most countries in the world.
Nvidia stock struggled to start 2025 after a new cheap AI model from Chinese startup DeepSeek prompted skepticism of Big Tech's massive spending on AI infrastructure and fears of a spending slowdown as investors increasingly scrutinize Big Tech's ability to generate a return on those investments. Signs of a potential slowdown in AI data center investments from Microsoft (MSFT), one of Nvidia's biggest customers, further fueled those fears.
