Veteran fund manager who predicted Nvidia stock rally makes surprising move originally appeared on TheStreet.
Nvidia (NVDA) shares climbed for five consecutive days this week, closing at a record high of $157.75 on June 27.
The rally has made the AI chipmaker the most valuable company again, with a market cap of about $3.85 trillion, ahead of Microsoft (MSFT) and Apple (AAPL) .
About three months ago, some pessimistic investors thought that Nvidia’s stock had probably reached a dead end as it fell sharply amid macro uncertainties and trade policies. But the stock has gained 67% since its low in early April.
Related: Veteran analyst drops bold new call on Nvidia stock
Nvidia was hit hard as the U.S. tightened export restrictions on advanced chips in April. The Trump administration said Nvidia would need an export license to ship the H20 processors to China. The H20 chip was designed under the Biden administration’s rules.
The chipmaker took a $4.5 billion charge in the April quarter and said it would have made an additional $2.5 billion in revenue without the restriction.
Nvidia’s CEO, Jensen Huang, has long warned that export controls could hurt U.S. chipmakers and even threaten the country’s position as the global leader in technology.
“If we want the American technology stack to win around the world, then giving up 50% of the world’s AI researchers is not sensible,” Huang recently said on CNBC.
Several developments have driven Nvidia’s rally since its April low. The stock first began to recover after the U.S. and China agreed to temporarily pause the elevated tariffs. Sentiment improved further when the Trump administration scrapped the Biden-era AI diffusion rule, which was another export control on advanced AI chips.
In May, shares got another boost from news that Nvidia would supply AI chips to Saudi Arabia’s Humain, a rising tech player in the region.
Related: Veteran analyst offers eye-popping Nvidia, Microsoft stock prediction
On May 28, Nvidia posted strong fiscal first-quarter results. Adjusted earnings came in at 96 cents per share on $44.06 billion in revenue, beating Wall Street’s estimates of 93 cents and $43.31 billion.
The company guided for $45 billion in revenue for the current quarter, just under analysts’ forecast of $45.9 billion. Nvidia said that number would have been roughly $8 billion higher without the ongoing export curbs to China.
This week’s rally was also helped by signs of easing U.S.-China trade tensions. Secretary of Commerce Howard Lutnick told Bloomberg that a trade deal with China has been finalized and signed.
