Shares of Nvidia rose by as much as 3.1% to $178.08 on Monday, as part of a broader market rally following signs of easing geopolitical tensions in the Middle East.
American stocks surged after President Donald Trump stated that Washington and Tehran were in talks and that strikes on Iranian energy infrastructure had been suspended.
These statements fueled optimism about a possible imminent resolution to the conflict.
The Dow Jones Industrial Average jumped 648 points, or 1.4%, while the S&P 500 gained 1.2%.
The Nasdaq Composite rose by 1.4%, driven by the strength of technology stocks.
Despite Monday’s gains, Nvidia’s shares continue to trade in a narrow range, reflecting investors’ persistent uncertainty about the broader artificial intelligence segment.
The stock has struggled to break out of this range in recent months, with markets reassessing the sustainability of massive spending on AI infrastructure and the long-term returns on these investments.
The fall in oil prices supports risk assets
The rally was accompanied by a sharp decline in oil prices, which had surged in recent sessions due to concerns about supply disruptions.
West Texas Intermediate crude fell by over 7% to around $90 per barrel, while Brent declined by over 8% to settle near $102.
The drop in oil prices helped to alleviate concerns about inflation and global growth, improving sentiment towards risk assets such as stocks and technology shares.
Chinese competition emerges as a risk
An emerging concern for Nvidia is the increasing competition in China, a key market for the company.
Chinese tech giant Huawei has launched its AI accelerator Atlas 350, targeting inference workloads—a fast-growing segment of the AI market.
According to local media, Huawei claims that the chip offers more than three times the computing power of Nvidia’s H20 processor, one of the limited products the American company is allowed to sell in China under export restrictions.
This development highlights the growing competitive pressure from domestic players as geopolitical constraints limit Nvidia’s access to the Chinese market.
Focus shifts to AI infrastructure and energy
Nvidia has also announced a series of partnerships aimed at supporting the next phase of AI infrastructure development.
The company is collaborating with firms like AES Corporation, Constellation Energy, and NextEra Energy to build ‘AI factories’ integrating IT infrastructure with energy systems.
These facilities are designed to connect to electrical grids more efficiently while functioning as flexible energy assets, reflecting the increasing importance of power availability to evolve AI workloads.
The initiative is based on Nvidia’s Vera Rubin AI architecture and aims to accelerate the deployment of high-performance computing infrastructures.
Analyst bullish on Nvidia
Wall Street’s sentiment towards Nvidia remains generally positive despite recent volatility.
Cantor Fitzgerald reiterated an ‘Overweight’ recommendation and a price target of $300 following the company’s GTC conference.
Analyst CJ Muse stated that the event highlighted the emergence of agentive AI and the increasing importance of token generation as a revenue driver.
He noted that Nvidia’s integrated platform approach positions it favorably to capitalize on the expansion of AI infrastructure, especially in an energy-constrained environment.
