Nvidia Stock Extends Rally as Saudi Arabia Doubles Down on AI Chip Spending

• Nvidia (NVDA) stock surges: Nvidia’s stock rose over 3% to $133.97, extending a 6% gain, with its market cap reaching $3.17 trillion, driven by major AI chip deals.
• $7 billion Saudi deal: Nvidia will supply several hundred thousand AI chips, including 18,000 GB300 chips, to Saudi Arabia’s Humain in a $7 billion deal, prompting Bank of America (BAC) to raise its price target to $160 from $150.
• Expanding Middle East presence: Nvidia’s deals with Humain, alongside potential UAE contracts for over one million chips, align with AMD (AMD) and Qualcomm (QCOM) agreements, reinforcing U.S. chipmakers’ role in Saudi Arabia’s AI ambitions.

Nvidia Corp. (NVDA) continues to solidify its dominance in the artificial intelligence chip market, with its stock surging over 3% to $133.97 in early Wednesday trading, building on a nearly 6% gain from the previous day that propelled its market capitalization to $3.17 trillion, a milestone not seen since February. The rally is driven by a series of high-profile deals, notably a multi-year agreement to supply several hundred thousand AI chips, including 18,000 advanced GB300 chips as part of its Grace Blackwell AI supercomputer, to Humain, a new Saudi Arabian AI venture backed by the $925 billion Public Investment Fund and chaired by Crown Prince Mohammed bin Salman. Bank of America (BAC) analysts valued this deal at $7 billion and raised their price target on Nvidia’s stock from $150 to $160, reflecting optimism about the company’s ability to capitalize on global AI infrastructure demand.

The Nvidia-Humain partnership, announced during an investment forum attended by President Trump, underscores Saudi Arabia’s strategic push to become a global AI hub, with Humain launching just one day prior to the event. This deal is part of a broader wave of U.S. chipmaker agreements with the Kingdom, including a $10 billion contract from Advanced Micro Devices (AMD) and additional commitments from Qualcomm (QCOM) to supply chips for Humain’s ambitious AI data center initiatives. These partnerships highlight the critical role of U.S. semiconductor companies in powering the next generation of AI technologies, particularly in regions prioritizing technological sovereignty and innovation.

Further fueling Nvidia’s momentum, a Bloomberg report on Tuesday suggested that the Trump administration may facilitate a deal allowing the United Arab Emirates to purchase over one million Nvidia AI chips, potentially expanding the company’s Middle Eastern footprint. This development aligns with a global race to secure advanced computing capabilities, where Nvidia’s chips are pivotal for training and deploying large-scale AI models. The company’s ability to secure such contracts underscores its technological leadership and the strategic importance of its products in addressing the computational demands of AI-driven applications.

The broader semiconductor industry is benefiting from this AI boom, with Nvidia, AMD, and Qualcomm positioning themselves as key suppliers to emerging AI markets. However, Nvidia’s unmatched scale and brand recognition in AI hardware give it a competitive edge, as evidenced by its market cap surpassing $3 trillion. Investors should remain cautious of potential risks, including geopolitical tensions and supply chain constraints, which could impact the execution of these large-scale deals. Nevertheless, Nvidia’s latest agreements reinforce its pivotal role in shaping the global AI landscape, with its stock performance reflecting strong market confidence in its long-term growth prospects. In summary, Nvidia’s $7 billion deal with Humain, alongside potential UAE contracts and a robust market position, cements its leadership in the AI chip sector, driving its stock to new heights.

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