Shares of Nvidia (NASDAQ: NVDA) jumped again today to start this week’s trading. The stock rose more than 5% before easing back Monday morning. That move kept the positive momentum going for the artificial intelligence (AI) leader. Shares were up 4.8% as of 12:09 p.m. ET.
Shares have soared about 20% in just the past two weeks as they rebounded from a tariff-induced sell-off. The geopolitical picture remains somewhat cloudy, but Nvidia bulls are starting to see a clearer business picture beyond the uncertainty.
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Is Nvidia’s China concern becoming a tailwind?
The stock had been declining earlier this year as the global trade picture became more murky. The company has already taken a quantifiable financial hit from export restrictions on its H20 specialty semiconductor chip. That chip was designed for sale in China, and new regulations forced the company to record a $5.5 billion charge for that inventory last month.
Sales to China were more than $17 billion last year, representing about 13% of total revenue. So word of a productive meeting over the weekend between Treasury Secretary Scott Bessent and his Chinese counterparts in Geneva has painted a more-bullish picture.
The stock is close to reaching the $3 trillion market cap threshold today as a result. That makes sense since signs of more cooperation between the U.S. and China should be a net benefit for Nvidia’s business.
That business is thriving elsewhere, too. A boost to sales in China will only add to Nvidia’s already growing profits. Investors should remember, however, that this weekend’s news of a thawing trade war isn’t yet a reality. A 90-day pause in reciprocal tariffs from both the U.S. and China is a good first step, though.
In fact, it might just be the start of the next bull run for the shares. There could be more volatility ahead, but Nvidia looks to be a fine long-term holding as AI hardware and software permeates many business sectors in the coming months and years.
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Howard Smith has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
