Just two months ago, Nvidia was reeling. The AI chip giant, once the darling of Wall Street, had lost 31% of its value for the year by early April 2025, injured by tariffs, export controls, and an edgy market. Pundits whispered about the end of the AI boom. But today, Nvidia has flipped the script in spectacular fashion. Its stock has soared 45% from April’s lows, restoring a jaw-dropping $1 trillion in market cap and putting the company firmly back in the spotlight as the kingmaker of the artificial intelligence revolution.

What Sparked the Rally

This isn’t just a lucky bounce. Nvidia’s resurgence is grounded in a series of powerful developments that have reignited investor confidence and supercharged demand for its world-leading AI chips.

  • Export Control Rollback: In mid-May, the US Commerce Department rolled back the AI diffusion rule, lifting major restrictions on Nvidia’s ability to sell its most advanced chips abroad. This was a game-changer, especially for Nvidia’s crucial business in China, and signaled a thaw in tense US-China trade relations. CEO Jensen Huang didn’t mince words, calling “the original export controls a “failure” and hailing the rollback as smart business”.
  • Global Partnerships: Nvidia’s future isn’t just about selling chips it’s about enabling national AI ambitions. In May, Saudi Arabia’s Public Investment Fund-backed Humain announced a deal to buy 18,000 of Nvidia’s state-of-the-art GB200 Grace Blackwell chips, laying the foundation for a national AI infrastructure. This came on the heels of Saudi Arabia’s $600 billion pledge to US industries, including AI, underscoring Nvidia’s central role in the global AI arms race.
  • Strong Earnings: Nvidia’s first-quarter revenue hit $44.06 billion, beating analyst expectations and calming nerves about its China exposure. Huang reassured investors that, despite some headwinds, Nvidia’s core business is “booming.” Analysts now see Nvidia as potentially benefiting from evolving US-China trade talks, with the company possibly becoming a linchpin in future agreements.
  • Relentless AI Spending: Tech giants like Meta, Microsoft, Amazon, and Apple are on an AI spending spree, collectively committing over $300 billion this year and, in Apple’s case, $500 billion over the next four years. This greedy demand for AI infrastructure is driving Nvidia’s growth, especially in data centers, with experts predicting this trend will continue for at least two more years.

Scarcity and the New AI Arms Race

What sets this phase apart is not just demand, but scarcity. Nvidia’s chips have become strategic assets, with nations and corporations scrambling to secure supply. This scarcity gives Nvidia unmatched pricing power and cements its role as the essential supplier in the AI race.  Yet, the challenges loom. The massive energy demands of AI factories are pushing Nvidia to innovate in power management and cooling. The next big leap in AI may come from making these systems more energy-efficient, not just faster, a challenge Nvidia is already investing in heavily.

The Road Ahead

Nvidia’s stunning rebound demonstrates not just resilience, but a deep market belief in its centrality to the future of AI. As companies and countries double down on artificial intelligence, Nvidia’s chips are becoming the currency of tomorrow’s digital economy. The company’s story is far from over, and all signs point to continued dominance as the AI boom accelerates.

The author’s opinion

Nvidia’s comeback is a testament to its resilience and strategic execution. As long as demand for AI continues to grow, the dominance of Nvidia looks unshakeable.