Trade Deal Ignites Nvidia (NVDA) Stock Rally—Chips Back on the Menu
Wall Street’s favorite AI cash machine just got a turbocharge. A newly inked trade deal slashes supply chain barriers for Nvidia—clearing the runway for its next earnings beat.
Why it matters: When NVDA sneezes, the entire semiconductor sector catches a cold. This deal bypasses geopolitical headaches that had investors spooked, putting rocket fuel back in the tank.
The cynical take: Of course the bulls return—nothing makes traders forget about valuation concerns like a fresh hit of tariff-free dopamine.
Navigating Regulatory Challenges
Earlier this year, Nvidia faced significant headwinds due to stringent U.S. export controls on AI chips, particularly the H20 model, leading to a $5.5 billion impairment charge . These restrictions severely limited Nvidia’s access to the Chinese market, which accounted for $17.1 billion in revenue last fiscal year.
Policy Shift Sparks Stock Market Optimism
In a recent policy shift, President TRUMP announced plans to rescind the Biden-era “AI diffusion rule,” which had imposed broad restrictions on AI chip exports . This move is seen as a boon for U.S. chipmakers, with Nvidia’s stock rising over 3% following the announcement . The policy reversal aims to simplify export regulations, potentially restoring Nvidia’s access to key international markets.
NVDA Chart Weekly – Buyers Need to Push Above the 50 SMA
From a technical perspective, Nvidia’s stock has surpassed the 100-day Simple Moving Average (SMA) at $115, a level that previously acted as resistance. The next critical resistance lies at the 50-day SMA around $120. A breakout above this level could signal a return to the long-term bullish trend.
Market Outlook
While the policy changes have injected Optimism into Nvidia’s prospects, the company continues to face challenges, including competition from domestic Chinese firms and the need to navigate evolving regulatory landscapes. Investors will be closely monitoring Nvidia’s upcoming earnings report on May 28 for further insights into the company’s performance and outlook.
