Nvidia’s Stocks Surge Amid Changes in AI Export Policies

Semiconductor giant Nvidia (NASDAQ: NVDA) continues to excel in the artificial intelligence (AI) sector. Since January 2023, Nvidia’s stock has skyrocketed over 800%. The recent decision by the Trump administration to abandon the Framework for AI Diffusion could further enhance its share price.

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Commerce Department Rescinds AI Diffusion Framework

The Framework for AI Diffusion was introduced during the latter days of the Biden administration. This set of comprehensive rules limited the sale of advanced semiconductors to various countries, impacting some U.S. allies.

The AI Diffusion framework categorized countries into three tiers, each with different access levels to U.S. technology:

• First-tier countries could import advanced AI chips without restrictions, including 18 close allies like Australia, Canada, and the UK.
• Second-tier countries faced limitations on imports, covering nations such as India, Israel, and Singapore.
• Third-tier countries faced prohibitions, including regions like China, Iran, North Korea, and Russia.

Nvidia criticized the AI Diffusion framework in a blog post, stating:

“Built on American technology, the adoption of AI around the world fuels growth and opportunity for industries at home and abroad. That global progress is now in jeopardy.”

Originally set to take effect on May 15, 2025, the Trump administration scrapped this framework, noting it could stifle U.S. innovation and harm diplomatic ties with numerous countries. Instead, analysts from Citigroup expect the administration to negotiate export regulations on a case-by-case basis.

Nvidia’s New AI Infrastructure Partnerships in the Middle East

During a recent visit to the Middle East, President Trump facilitated several partnerships between U.S. tech firms and Saudi Arabia, agreements that would have been hindered by the AI Diffusion rules. Nvidia is among those companies, alongside AMD, Alphabet, and Amazon.

Nvidia is collaborating with the Saudi company Humain to build AI data centers, starting with 18,000 Nvidia Grace Blackwell superchips, incorporating both Grace CPUs and Blackwell GPUs, along with InfiniBand networking. Additionally, Humain plans to utilize Nvidia’s Omniverse simulation software for physical AI solutions testing.

Nvidia will also work with the Saudi Data & AI Authority (SDAIA) to establish a sovereign AI factory using 5,000 Nvidia Blackwell GPUs, aimed at developing secure data infrastructure.

This shift brings renewed investor interest in the Middle East, previously overlooked for GPU demand due to the AI Diffusion restrictions. However, Nvidia still encounters challenges, particularly with the Trump administration limiting H20 GPU sales to China.

Wall Street’s Positive Outlook on Nvidia Stock

Wall Street analysts express strong confidence in Nvidia’s future. Among the 69 analysts monitoring the company, 87% have issued buy ratings. The median target price stands at $160 per share, suggesting an 18% upside from its current price of $135.

Moreover, analysts predict that Nvidia’s adjusted earnings will increase by 46% over the next year. This makes the current valuation of 45 times earnings appear reasonable, particularly as the company exceeded earnings estimates by an average of 7% in the last four quarters. Investors looking to increase their Nvidia exposure may consider purchasing shares now.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.