Nvidia hits the jackpot following the U.S.-China trade truce; here's why Jensen Huang is smiling all the way

After the announcement of a 90-day tariff pause between the US and China, the Nasdaq Composite, which is led by tech stocks, has nearly wiped out all of its losses so far this year, as per a report. But in the widespread rally, there's one winner according to Wedbush analyst and tech stock watcher Dan Ives, that is; Nvidia.

Tariff Truce Sparks Tech Rally

The stock of the chipmaker jumped over 5% Monday after the deal's news came out, however, shares are still down 3% year to date, as per Yahoo Finance.

Why One Analyst Thinks Nvidia Is the Biggest Winner

During an interview with Yahoo Finances, Ives said, “It would have to be Nvidia,” as quoted in the report. His remark came just before Nvidia's market capitalization broke above $3 trillion for the first time since February, reported Yahoo Finance.


He explained that the broader tariff relief rally in tech, along with an artificial intelligence investment cycle that remains intact, creates a "dream scenario" for the AI chip leader, as per the report.

The analyst said, “I think [the stock] makes ... new all-time highs because there's only one chip in the world fueling the AI revolution, and that's led by [the] godfather of AI, Jensen, and Nvidia,” as quoted in the report.

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Saudi Arabia’s AI Ambitions Fuels Nvidia's Gains

Another reason for the chipmaker's stock to go up is because Nvidia announced it would sell 18,000 chips to an AI startup owned by Saudi Arabia’s sovereign wealth fund, according to Yahoo Finance.

Concerns Over Where the Chips Might End Up

While, there is a potential concern with shipping top chips to Saudi Arabia as those chips could then be smuggled to China, bypassing US export controls, as per the report.

Chief strategist at MacroLens, Brian McCarthy pointed out that, “It's just very, very hard to put a net around this stuff,” adding, "The Chinese are very diligent. They have a very good network of ways to move products underground … for all kinds of products," quoted Yahoo Finance.

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However, apart from the national security concerns, in case China indirectly buys the chip, that could be a boon for Nvidia shareholders, according to the report.

Ives mentioned, “It shows it's not just about China,” adding, “This just shows what I believe is going to be happening over the coming years — the trillions being spent on AI," quoted Yahoo Finance.

FAQs

Why is Saudi Arabia involved with Nvidia now?
Nvidia struck a deal to send 18,000 chips to a Saudi-backed AI startup, as per Yahoo Finance.

Could these chips end up in China somehow?
It’s possible. Experts warn that enforcing chip export controls is difficult, and there’s concern about chips being rerouted through third parties.