What Happened?
Shares of leading designer of graphics chips Nvidia (NASDAQ: NVDA) jumped 2.6% in the afternoon session after President Donald Trump softened his stance on China tariffs, which boosted technology stocks, and the company made several announcements regarding new partnerships and product adoption for its AI data centers. The easing of trade tensions was particularly beneficial for chipmakers like Nvidia, as China represented a critical market for its data center products.
Adding to the positive news, the company announced a collaboration with ABB to develop next-generation AI data centers and revealed that both Meta and Oracle would use its Spectrum-X Ethernet switches to speed up their AI networks. Further partnerships were also confirmed with Intel and Samsung Foundry. Reinforcing the optimistic outlook, a Mizuho analyst raised the price target on the stock to $225 from $205, citing Nvidia's dominance in the AI data center market.
The shares closed the day at $188.32, up 2.8% from previous close.
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What Is The Market Telling Us
Nvidia’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 3% after the threat of a 'massive increase' in tariffs on Chinese goods by President Donald Trump, reignited fears of a trade war.
In a social media post, Trump described China as becoming 'hostile,' sending a ripple of concern through the market. The semiconductor sector, which relies heavily on global supply chains and sales in China, was hit particularly hard. The Philadelphia SE Semiconductor index dropped 3.4% following the announcement. This development adds to existing tensions, including Beijing's recent expansion of export controls on rare earths and an antitrust probe into Qualcomm's acquisition of Autotalks. Investors are showing caution as the prospect of escalating trade disputes between the world's two largest economies could disrupt production and demand for chipmakers.
Nvidia is up 36.1% since the beginning of the year, and at $188.30 per share, it is trading close to its 52-week high of $192.57 from October 2025. Investors who bought $1,000 worth of Nvidia’s shares 5 years ago would now be looking at an investment worth $13,215.
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