Nvidia (NASDAQ: NVDA) has had a tough start to 2025, with shares down about 8% year-to-date. However, recent momentum shows a 27% jump in the last three weeks, driven by strong demand for Nvidia’s AI chips and positive semiconductor industry reports.
A major factor boosting confidence is the recent cooling of the U.S.-China tariff dispute. The two countries agreed to reduce reciprocal tariffs by 115% for 90 days, lowering U.S. tariffs on Chinese goods to 30%, and Chinese tariffs on U.S. goods to 10%.
This easing is expected to relieve pressure on Nvidia’s supply chain and sales, especially since Nvidia raised GPU prices by up to 15% to offset tariffs. On the revenue front, analysts forecast Nvidia to hit $43 billion for fiscal Q1 (ending April 27), a 65% year-over-year increase.
Strong orders from Chinese tech giants like ByteDance, Alibaba, and Tencent—totaling at least $16 billion—could help Nvidia surpass these estimates. China’s rising demand for AI chips is a critical growth driver after accounting for just over $17 billion in revenue from the region last year.
Additionally, Nvidia is adapting its AI chips to comply with export controls, maintaining its access to the Chinese market. Combined with U.S. AI infrastructure projects and Nvidia’s tight control over its chip supply chain, the company looks well-positioned to deliver solid results on May 28 and sustain its stock rally.
Currently, Nvidia trades at about 28 times forward earnings, which is attractive compared to the U.S. tech sector’s average of 44, offering a potential buying opportunity for investors.
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