TLDR
- President Trump announced progress on a deal allowing UAE to purchase advanced AI chips, pushing Nvidia stock up 0.7%
- Nvidia shares have climbed 16% this week following US-China tariff reduction agreement
- The company is planning a new research facility in Shanghai while keeping chip design outside China
- CEO Jensen Huang aims to grow China revenue from $17 billion to $50 billion in coming years
- Analysts maintain strong buy recommendations for Nvidia stock with 34 Buy ratings versus 5 Hold and 1 Sell
Nvidia shares rose 0.7% to $135.77 in premarket trading Friday following President Trump’s announcement that the United States is working toward an agreement that would enable the United Arab Emirates to purchase cutting-edge American AI chips.
The news continues a strong week for the chipmaker. Its stock has already jumped 16% since Monday’s announcement of a 90-day tariff reduction agreement between the US and China.
The company recently saw its market value climb back above $3 trillion after finalizing a deal to provide AI chips to Saudi Arabia.
The positive sentiment extended to other chip manufacturers. AMD stock increased 1.8% before market open, while Broadcom, Qualcomm, and Intel all posted modest gains.
Global Strategy Expands
While strengthening ties in the Middle East, Nvidia is simultaneously working to cement its position in the Chinese market despite ongoing trade challenges.
The company has revealed plans to establish a new research facility in Shanghai. This center will focus on understanding Chinese customer requirements and navigating the complex regulatory environment created by US export restrictions.
To avoid intellectual property concerns, Nvidia will keep all chip design and manufacturing operations outside of China.
The planned Shanghai facility will also concentrate on product optimization and research in areas like self-driving technology.
Reports indicate Nvidia hopes to attract top Chinese AI talent to the center, potentially creating headwinds for local competitors.
Market Growth Targets
China currently accounts for approximately 14% of Nvidia’s annual revenue, translating to around $17 billion.
Jensen Huang, Nvidia’s CEO, believes this figure could nearly triple to $50 billion within just two years.
The Shanghai municipal government has reportedly expressed initial support for the research center proposal.
Nvidia has been actively seeking approval from the Trump administration for its China expansion plans.
During his recent visit to Saudi Arabia, President Trump spoke highly of Huang, remarking: “What a job you’ve done. He’s got 99% of the chip market. That’s not easy to beat.”
Wall Street remains bullish on the company’s prospects. According to TipRanks data, Nvidia holds a Strong Buy consensus with 34 Buy ratings far outweighing just 5 Hold and 1 Sell recommendation.
The most optimistic price target reaches $200, while the average target of $164.51 suggests potential upside of 22.01% from current trading levels.
The latest UAE development strengthens Nvidia’s growing influence in Middle Eastern technology markets, building on its recent Saudi Arabia agreement.
