Nvidia’s Stock (NASDAQ: NVDA) Continuing To Rally – What Is Driving Price Action?

Nvidia‘s stock (NASDAQ: NVDA) is once again attracting bullish inflows, with the pre-market price adding 3% so far to what has been a strong reversal. Since April 21st, a little over 3 weeks ago, Nvidia's stock price has gained 34%, with easing U.S-China tensions the most recent accelerant.

Despite the recent rally, the stock remains red on a YTD basis (-6.06%), as the turbulent start to the year made it's mark. Escalating U.S.-China trade tensions and new export restrictions on advanced AI chips were seen as having an outsized impact on Nvidia, and with some of these issues reversing, NVDA has done the same.

A major catalyst for Nvidia’s recent rally is its deepening partnership with Humain, a subsidiary of Saudi Arabia’s Public Investment Fund. This alliance aims to build AI factories powered by Nvidia’s Blackwell and Blackwell Ultra GPUs, dovetailing with Saudi Vision 2030’s ambition to make the kingdom a global AI leader. With projected investments exceeding $10 billion in data center infrastructure, the deal could cement Nvidia’s dominance in high-growth international markets and offset some of the revenue lost to China’s tightening restrictions.

What Comes Next?

The most significant near-term risk remains U.S. export controls, which forced Nvidia to take a $5.5 billion charge in April after sales of its H20 AI chip to China were abruptly blocked. In response, Nvidia has fast-tracked a downgraded H20 variant, compliant with new Commerce Department rules, for a July 2025 release. While this adaptation demonstrates Nvidia’s agility, analysts warn that China-related restrictions could slash quarterly revenues by $5–7 billion and open the door for domestic Chinese rivals like Huawei, now commanding 15% of China’s AI chip market.

In a bold strategic move, Nvidia announced a $500 billion U.S.-focused AI infrastructure initiative in April, including ramped-up production of Blackwell GPUs at TSMC’s Phoenix, Arizona facility. This initiative is expected to create 200,000 jobs by 2028 and aligns with CEO Jensen Huang’s vision for “gigawatt AI factories” powering next-generation applications. The anticipated Rubin GPU architecture, unveiled in March, promises a 3.3x performance leap over current models, with pre-orders already topping $30 billion and shipments set for late 2026.

Despite the recent gains, Nvidia’s forward price-to-earnings (P/E) ratio of 26.4 for fiscal 2026 remains well below its 10-year average of 59.7. The current P/E of 43.43, based on fiscal 2025 earnings of $2.99 per share, represents a 22% discount to its January 2025 peak. Many analysts believe this leaves room for further upside, with some projecting a $230 price target by year-end should Nvidia sustain its AI infrastructure momentum and successfully navigate regulatory hurdles.

Nvidia’s earnings report on May 28 is also drawing ever closer, and many will be marking the date in the calendar as one to watch.

Consensus forecasts call for $43 billion in revenue, a 65% YoY increase, driven by data center sales (now accounting for 90% of total revenue). EPS is expected at $0.89, though UBS warns higher R&D expenditures on the Rubin and H20 redesigns could pressure margins. Q2 guidance, China mitigation strategies, and updates on the Rubin GPU timeline, will also be front and centre of focus.