Why Nvidia’s Spectacular May Rally Has Wall Street Buzzing—AI Deals, Trade Truces, and What 2025 Holds
Nvidia stock surged 24.1% in May on big AI deals and a US-China tariff truce. Is the chip giant unstoppable in 2025? Here’s what you need to know.
- +24.1%: Nvidia stock’s gain in May 2025 alone
- $44.1B: Nvidia’s Q1 2025 revenue, up 69% YoY
- 500,000: Nvidia AI chips heading to UAE in first mega-deal
- 69x: Forward earnings multiple after the monster rally
Nvidia (NVDA) is no stranger to jaw-dropping rallies, but May 2025 might be one for the record books. Shares shot up an impressive 24.1%, leaving other semiconductor players in the dust. But the story behind this rally goes far beyond a simple earnings beat—it’s about international deals, global policy shifts, and Nvidia’s central role in the future of AI.
What unleashed this surge? A powerful combination of policy breakthroughs and bold business deals, sending both Wall Street and tech fans into a frenzy.
What Sparked Nvidia’s Massive Rally?
It wasn’t just Nvidia’s financials driving its rise. After weeks of tense negotiations, the US and China finally agreed to lower trade tariffs. The US slashed duties on Chinese goods from 145% down to 30%, easing pressure on battered tech stocks like Nvidia. Markets responded instantly, with a “relief rally” that erased the sting of the notorious “Liberation Day” stock crash in early April.
But the global plot thickened. On the heels of the tariff détente, the Trump administration struck major AI chip deals with Saudi Arabia and the UAE. This move unlocked enormous orders for Nvidia’s signature GPUs, critical for powering generative AI across the world.
How Big Are These Middle East AI Deals?
The numbers are staggering. Saudi Arabia’s Humain, funded by the enormous Public Investment Fund, committed to building a 500 MW AI cluster—stacking several hundred thousand Nvidia GPUs over the coming years. Meanwhile, Abu Dhabi’s G42 will kick off by importing 500,000 Nvidia chips, with shipments rolling out now. These contracts will underpin new AI growth for years, not months.
For more about the role of public investments in tech, check out Bloomberg.
Did Risks Vanish Overnight?
Not quite. Even as the US relaxed AI chip restrictions for strategic Gulf allies, it doubled down on China. In April, regulators banned Nvidia’s H20 chip—a China-ready GPU—forcing a painful $5.5 billion writedown and weighing on quarterly profits. Still, Nvidia’s Q1 revenue soared 69%, beating all expectations and soothing investors’ nerves.
Adjusted earnings per share rose 33% to $0.81 despite the inventory hit. Management assured investors that supply bottlenecks tied to the new “Blackwell” chip are clearing up quickly.
Is Nvidia’s Dominance Built to Last?
With a forward earnings multiple at 31x and the spotlight fixed on new AI rollouts, Nvidia’s valuation seems justified—if growth keeps outpacing competition. However, giants like Amazon, Google, and Microsoft are now crafting their own custom AI chips. If these in-house designs undercut Nvidia’s GPUs, it could slow the rocket-fuelled trajectory.
Stay updated on big tech hardware trends with TechCrunch and deeper chip analysis from CNBC.
What Should Investors Watch Out for in 2025?
- Blackwell Launch: Can Nvidia’s next-gen chips keep extending its AI lead?
- AI Regulation: Will shifting US and global rules favor or hinder Nvidia’s global reach?
- Cloud Giants: If hyperscalers keep building their own chips, will Nvidia lose key market share?
- Revenue Mix: Can Middle East and emerging market sales compensate for lost China business?
The road is far from smooth. But with contracts secured and global AI demand skyrocketing, Nvidia is poised to stay front and center in the AI revolution—at least, if it can keep fending off rivals and managing geopolitics.
Ready to ride the next AI wave? Keep these steps in mind before you invest in Nvidia’s future:
- Monitor news on US-China and Middle East tech policy
- Check Nvidia’s quarterly financials for updates on Blackwell chips and international sales
- Watch for announcements from cloud providers about new in-house AI processors
- Review global tech and finance news at trusted sites like Reuters
Don’t miss the AI chip race—stay informed and make your move before the next market surge!
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