Nvidia Stock Surges as Trump Seals Another AI Chip Deal with UAE.

Nvidia’s stock soared again on Friday, May 16, 2025, following President Donald Trump’s new deal to supply American-made artificial intelligence (AI) chips to the United Arab Emirates (UAE).

The agreement aims to bolster Abu Dhabi’s access to advanced AI technology, further cementing the U.S.’s role in the global AI chip market. This follows a recent U.S.-China tariff reduction deal and a landmark agreement to sell AI chips to Saudi Arabia, both of which have fueled Nvidia’s meteoric rise.

The company’s stock climbed 0.6% to $135.48 in early trading, outpacing the S&P 500’s modest 0.1% gain. Nvidia’s market valuation, which recently surpassed $3 trillion, continues to reflect its dominance in the AI sector.

Other chipmakers, including Advanced Micro Devices (AMD), Broadcom, Qualcomm, and Intel, also saw gains, underscoring the broader market’s enthusiasm for AI-driven growth.

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A Week of Wins for Nvidia

Since Monday, May 12, when the U.S. and China agreed to a 90-day tariff reduction, Nvidia's stock has surged, gaining 16.2%. This deal eased trade tensions, boosting investor confidence in tech giants like Nvidia.

The company’s agreement to supply AI chips to Saudi Arabia further propelled its valuation, which was an important turning point as its market cap crossed $3 trillion for the first time in months.

Real-time market data indicates Nvidia’s stock reached an intraday high of $136.12 on Friday, reflecting strong investor optimism. The UAE deal, announced early Friday, positions Nvidia to tap into the Middle East’s growing demand for AI infrastructure, with Abu Dhabi emerging as a key player in the region’s tech ambitions.

Did You Know?
Nvidia’s AI chips, based on its cutting-edge H100 and upcoming Blackwell architectures, are estimated to power over 70% of the world’s AI workloads, from generative AI models to scientific research.

Broader Chip Sector Rides the Wave

Trump's AI chip diplomacy had a ripple effect across the semiconductor industry. AMD’s stock jumped 1.9%, reaching $158.32, while Broadcom edged up 0.3% to $1,652.45. Qualcomm gained 0.4%, trading at $182.67, and Intel rose 0.6% to $21.45.

These gains reflect the market’s belief that increased global demand for AI chips will benefit the entire sector. The UAE deal, in particular, highlights the strategic importance of American chip technology in shaping geopolitical and economic alliances.

Analysts note that the Middle East’s push to diversify from oil-based economies is driving significant investments in AI, creating opportunities for U.S. chipmakers.

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Market Implications and Future Outlook

Nvidia’s recent performance underscores its pivotal role in the AI revolution, with its chips powering everything from data centers to autonomous vehicles. The company’s ability to secure high-profile international deals suggests sustained growth potential, though some analysts caution about valuation concerns given its rapid ascent.

The S&P 500’s steady performance, up 0.1% to 5,720.34, indicates broader market stability, but tech stocks like Nvidia remain the primary drivers of growth.

Investors are now eyeing upcoming earnings reports and further trade developments, particularly with the U.S.-China tariff truce set to expire in August 2025. For now, Nvidia’s dominance in AI chip innovation and global partnerships keeps it at the forefront of the tech rally.