Two Key Developments Sparked a Rally for Nvidia Stock on Tuesday
Two announcements over the past 24 hours suggest that the secular tailwinds remain strong.
Nvidia stock is still attractively priced.
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Shares of Nvidia (NASDAQ: NVDA) were off to the races on Tuesday, climbing as much as 6.4%. As of 11:35 a.m. ET, the stock was still up 5.6%.
The catalyst that sent the artificial intelligence (AI) chipmaker higher was news that the company could gain greater access to two important markets.
A story broke late Monday that the Trump administration was considering a deal that would involve a large-scale sale of AI-centric chips to G42, a company located in the United Arab Emirates, according to a report in The New York Times. The deal could send hundreds of thousands of graphics processing units (GPUs) to the Emirati AI specialist and its U.S. partner, OpenAI.
Then, less than 24 hours later, Nvidia announced a strategic partnership with Saudi Arabian company Humain to sell more than 18,000 AI-centric chips. These state-of-the-art GB300 Blackwell chips will power a 500-megawatt data center in the Middle Eastern country.
These reports come on the heels of the Trump administration's decision to rescind the so-called AI Diffusion Rule, which would have limited the sale of Nvidia's most advanced processors in the region.
Investors have been concerned that stricter controls on the sale of GPUs to companies outside the U.S. would hamstring Nvidia, casting doubt on the company's potential for future growth. The willingness of the Trump administration to revise these rules seems like it is opening up new opportunities for Nvidia.
And at just 29 times next year's expected earnings, Nvidia stock is attractively priced.
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Danny Vena has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
Two Key Developments Sparked a Rally for Nvidia Stock on Tuesday was originally published by The Motley Fool
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