Nvidia (NVDA) Stock Price & Analysis: Saudi Crown Prince Bets Big on AI Chip Giant
TLDR:
Nvidia stock jumped over 4%, contributing to a 15% rally over five days
Saudi Arabia’s Humain AI venture will purchase several hundred thousand Nvidia chips over five years, valued at around $7 billion
Trump administration is moving to rescind Biden-era export restrictions on AI chips
Nvidia stock has recovered 56% from its April low of $87 to $135
The Saudi deal starts with 18,000 Blackwell chips and could help offset concerns about AI spending sustainability
Nvidia stock is on a hot streak, jumping over 4% on Wednesday as part of a 15% rally over the past five days. This puts the AI chip giant back in positive territory for the year after a rocky start to 2025.
The gains come as US chipmakers, including Nvidia, announced massive deals with Saudi Arabia during an investment forum attended by President Trump.
Nvidia revealed it will supply several hundred thousand AI chips to Saudi Arabia’s AI venture Humain over the next five years. The deal kicks off with the sale of a Grace Blackwell AI supercomputer using 18,000 advanced GB300 chips.
Bank of America analysts estimated the value of the Nvidia-Saudi deal at $7 billion. They raised their price target on Nvidia stock to $160 from $150 following the announcement.
Humain is a new AI venture owned by Saudi Arabia’s $925 billion Public Investment Fund. It’s chaired by Crown Prince Mohammed bin Salman and was launched just before Trump’s visit.
Global AI Landscape Shifting
The deals represent a major shift in the global AI landscape. While China has been the key competitor to the US in AI development, the Middle East is now emerging as another major player.
Other US chipmakers also secured deals with Saudi Arabia. AMD struck a $10 billion agreement to supply chips for Humain’s AI data center plans. Qualcomm also unveiled a partnership with the Saudi venture.
Server maker Super Micro Computer, which uses Nvidia’s AI chips, announced a separate $20 billion deal with Saudi Arabian data center company DataVolt. Its stock rose 15.7% on Wednesday.
Bernstein analyst Stacy Rasgon viewed the news positively for AI hardware demand. “For investors worried about AI capex sustainability, we now have another deep-pocketed customer willing and capable to spend large amounts of money,” he noted.
This development comes at a crucial time. Investors have been scrutinizing whether US tech companies can maintain their enormous spending on AI infrastructure while still figuring out how to fully monetize their AI products.
Export Policy Overhaul
Coinciding with these deals, the Trump administration is reshaping US export policies. Bloomberg reported that the administration may allow the United Arab Emirates to purchase “more than a million” Nvidia AI chips.
The Department of Commerce has initiated the rescission of the Biden-era “AI diffusion rule,” which was meant to prevent the smuggling of US AI chips to China.
The department also stated that “using Huawei Ascend chips anywhere in the world violates US export controls.” This could make it harder for Huawei to sell its AI chips outside China.
Rasgon commented that this interpretation “would clearly make it more difficult for Huawei to sell Ascend chips to customers outside of China.” He added, “This is probably a positive for NVDA and other US AI names.”
The Saudi deals and export policy changes have helped Nvidia’s stock recover dramatically from its April low. At its lowest point on April 7, Nvidia’s stock price had fallen 43% from its 52-week high of $153 to under $87.
Since then, the stock has rebounded to $135, representing a gain of 56%. This means a £10,000 investment at the bottom would now be worth about £15,600.
The triggers for both the fall and subsequent rise stemmed largely from President Trump’s policies. His tariff announcement on April 2 hammered tech stocks, while his Middle East diplomacy has now opened new markets.
Saudi Arabia plans to build AI factories with a projected capacity of up to 500 megawatts over the next five years. The kingdom, along with President Trump, touted a $600 billion deal for US technology, weapons, and infrastructure purchases.
However, the investments unveiled so far total much less than the announced $600 billion figure.
The Nvidia stock price spiked in response to these developments. It’s up 16% in just the past three days, suggesting that rumors about declining US AI chip dominance may have been premature.
The post Nvidia (NVDA) Stock Price & Analysis: Saudi Crown Prince Bets Big on AI Chip Giant appeared first on CoinCentral.
Filed under: News - @ May 15, 2025 9:24 am