Nvidia Outpaces Market With AI-Powered Growth, Nears Record Highs

Nvidia Corp. NVDA is trading close to its 52-week high of $161 on Tuesday. The stock has seen a notable increase this year, rising almost 18% year-to-date and gaining over 64% in market value in the last three months.

This performance surpasses the broader market, as the S&P 500 and NASDAQ Composite indexes have generated approximately 6% in returns year-to-date.

In May, Nvidia reported first-quarter revenue of $44.1 billion, a 69% increase year-over-year and a 12% sequential rise. This figure exceeded the Street consensus estimate of $43.2 billion, despite a new export ban impacting sales of its chips to China, one of its significant markets.

Also Read: AI Momentum Powers Nvidia, Arm And Chip Supply Chain In BofA Recap

Recent Key Events Impacting Valuation

Several recent events have influenced Nvidia’s valuation. On July 4, 2025, President Donald Trump unveiled the “Big Beautiful Bill,” which would raise the semiconductor investment tax credit from 25% to 30% through 2026, giving chipmakers more substantial incentives to expand U.S. manufacturing.

He also created the United States Investment Accelerator within the Commerce Department by executive order, shifting control of the CHIPS Act program directly under the White House.

Although Trump previously criticized the $39 billion in grants and $75 billion in loans under the CHIPS and Science Act, he now backs pro-chip policies through this bill, which has cleared the Senate and is awaiting a House vote.

Also in July, OpenAI confirmed it will continue using Nvidia AI chips at scale, rejecting Alphabet’s GOOGL GOOG Google’s tensor processing units (TPUs) despite a recent cloud deal with Google Cloud. Nvidia, in turn, reaffirmed its partnership with OpenAI, highlighting its role as the core hardware provider for OpenAI’s AI models.

Supply Chain And Export Controls

Reportedly, contract chipmaker and key Nvidia supplier Taiwan Semiconductor Manufacturing Co. TSM has accelerated its U.S. expansion. This move is a response to Washington’s chip tariff policies, leading TSM to delay the construction of its second plant in Japan to prioritize its growing American footprint.

In March, TSM Chairman C.C. Wei announced an additional $100 billion U.S. investment, building on the $65 billion disclosed in April 2024. This expanded investment aims to boost domestic chipmaking to support major clients like Nvidia and Apple Inc. AAPL and reduce reliance on overseas production.

Meanwhile, the U.S. is drafting new export controls to prevent Nvidia AI chips from reaching China via third-party routes, specifically through Malaysia and Thailand. This marks the first formal step in Trump’s overhaul of prior AI chip export rules, though key security questions remain unresolved.

These U.S. sanctions had previously compelled Nvidia to halt H20 chip exports to China on April 9, resulting in a $4.5 billion first-quarter charge for Nvidia, attributed to excess inventory and purchase commitments. Consequently, Nvidia projected its second-quarter revenue at $45 billion, approximately $780 million below estimates, citing an $8 billion impact from lost H20 sales due to these export restrictions.

Analyst Projections

Thirty-seven analysts have set a consensus price forecast of $179.17 for Nvidia. Loop Capital issued the highest forecast at $250 on June 25, 2025, while Seaport Global gave the lowest at $100 on April 30, 2025. The latest ratings from Citigroup (July 7), Mizuho (July 3), and Loop Capital (June 25) average a forecast of $208.33, suggesting a potential upside of 30.65% for Nvidia based on those recent views.

NVDA Price Action: NVDA stock is trading higher by 0.82% to $159.59 premarket at last check Tuesday.

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