Prime Highlights:
Nvidia’s market value surged more than $3 trillion, temporarily surpassing Apple, after sky-high demand for AI chips and international partnerships propel its growth.
New Saudi Arabian business agreements and eased U.S.-China trade restrictions are propelling robust demand for Nvidia and its rivals.
Key Facts:
Nvidia shares rose 5.6% to Tuesday’s market cap of nearly $3.2 trillion.
The company is collaborating with Saudi Arabian firm Humain to build a massive AI data center powered by Nvidia GPUs.
Important Background:
Nvidia is again in the spotlight of investor attention as its valuation passed the $3 trillion mark, surpassing Apple briefly to become the globe’s second-most valuable company. This feat is a reflection of Nvidia’s dominant role in powering artificial intelligence use cases and the ever-increasing demand for its top-tier graphics processing units (GPUs).
Among Nvidia’s key drivers of success is a new partnership with Humain, a Saudi Arabian company, to create a 500-megawatt AI data center. The data center, launched at the Saudi-U.S. Investment Forum, will be powered by Nvidia’s latest Grace Blackwell Superchips. In the first phase, the center will use 18,000 GB300 chips, representing Saudi Arabia’s ambition to join the global AI ranks and Nvidia’s continued dominance in infrastructure-grade computing.
A further tailwind for Nvidia has been easing regulatory risks. The recent reversing of some US export regulations about AI chips by some, recently tightened by the Biden administration, has quietened investors’ concern over market access, especially the sensitive markets in Asia and the Middle East. This has helped present a possibility for US chipmakers to keep and enhance their global supply partnerships.
The broader chip business is also performing better. Companies like AMD and Broadcom saw their shares rise on comparable news, which implies that the tide could be rising with respect to optimism over semiconductors. Nvidia’s distant-term growth stories are still blessed by analysts with hopes building toward forthcoming chip deliveries created especially for marketplaces like China and increasing revenues down the line in 2025. Though some mild modifications were made to price expectations, Nvidia’s stance remains healthy leading up to its May 28 earnings announcement.
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