Nvidia (NVDA) Stock Rises After Trump Eases China Tariff Concerns

TLDR

• Nvidia stock climbed Monday after President Trump eased concerns about China tariffs, saying “it will all be fine” following his Friday threat of 100% tariffs on Chinese goods
• CEO Jensen Huang confirmed Nvidia’s participation in Elon Musk’s xAI venture and said demand for Blackwell GPUs is “really, really high”
• Piper Sandler reiterated its Overweight rating with a $225 price target, noting demand continues to exceed manufacturing capacity across all product lines
• Nvidia struck a $100 billion partnership with OpenAI to deploy at least 10 gigawatts of AI data centers running Nvidia processors
• The company reported Q2 earnings of $1.05 per share on sales of $46.74 billion, beating estimates, and announced a $60 billion stock buyback

Nvidia shares recovered Monday following a turbulent end to last week. The stock gained ground after President Trump walked back concerns about escalating China tensions.

Trump posted on Truth Social Sunday that China relations would be fine. This came after his Friday threat to impose 100% tariffs on Chinese goods.

The Friday selloff was triggered by China’s new restrictions on rare-earth materials. These materials are critical for semiconductor production.

Strong Demand Continues

Huang also confirmed a Bloomberg report about the company’s involvement with xAI. Nvidia is participating in billionaire Elon Musk’s artificial intelligence venture.

The AI chip maker has been seeing demand exceed its manufacturing capacity. This applies across all of its product lines according to analyst reports.

Piper Sandler maintained its Overweight rating on the stock. The firm set a $225 price target based on current business conditions.

The research firm noted that Nvidia’s funding to customers like OpenAI and CoreWeave appears protected. These partnerships don’t face the circular financing concerns affecting other tech companies.

Taiwan Semiconductor reported strong September results last Thursday. The Nvidia supplier posted a 31% year-over-year sales increase to $10.9 billion.

Major Partnership Deals

Nvidia announced a $100 billion investment in ChatGPT creator OpenAI in September. Under this partnership, OpenAI will deploy at least 10 gigawatts of AI data centers running Nvidia processors.

Advanced Micro Devices also partnered with OpenAI this week. AMD will power 6 gigawatts of OpenAI’s infrastructure using multiple generations of its graphic processing units.

The Nvidia-OpenAI deal could draw antitrust attention. Andre Barlow, an antitrust lawyer, suggested the partnership may capture Department of Justice interest according to Reuters.

Evercore ISI raised its Nvidia sales estimates by $5.5 billion for the second half of 2026. The firm boosted its price target to $225 from $214.

Bank of America analysts expect the OpenAI investment to return three to five times the initial investment. Stacy Rasgon at Bernstein raised questions about Nvidia investing in startups that then buy its GPUs.

The analyst noted that overall demand remained healthy. Huang commented that the U.S. is “not far ahead” of China in AI technology despite better AI models.

China was ahead in energy, open-source AI models and AI application development, he said. The company faces continued pressure in its China business from the Chinese government.

Recent Financial Performance

Nvidia reported fiscal second-quarter earnings of $1.05 per share. This beat the estimate of $1.01 per share.

Sales of $46.74 billion topped views of $46.05 billion. The company reported zero sales from its China H20 chip in the quarter.

The fiscal third-quarter revenue outlook came in at $54 billion. Wall Street was expecting $53.43 billion.

Nvidia also announced a $60 billion stock buyback. In August, the company secured a license to sell H20 AI chips in China.

The deal requires Nvidia to give 15% of its China chip revenue to the U.S. government. Piper Sandler notes that while third-quarter guidance excluded H20 chip revenue, the company appears positioned to meet Wall Street expectations.

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