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  • Analyst Optimism Drives Rally
  • Recovery From Earlier Challenges
  • Policy Shifts Provide Tailwinds
Nvidia nears record high as AI rally adds $1 trillion

Nvidia shares climbed Wednesday, inching closer to a record high as the artificial intelligence chipmaker extended a rally that has added roughly $1 trillion in market value since April. The stock rose nearly 1% in premarket trading, targeting its record closing price of $149.43 set in January.

The advance follows a 2.6% jump Tuesday that brought shares to $147.90, their highest level since the January peak. Loop Capital fueled Wednesday's gains by raising its 12-month price target to $250 from $175, citing expectations that AI compute markets could justify a $6 trillion market capitalization for the company.

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Nvidia stock looks to extend gains, notch record high in remarkable 2025 turnaround
Nvidia stock looks to extend gains, notch record high in remarkable 2025 turnaround
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Nvidia stock jumps to highest levels since January with record high close in sight
Nvidia stock jumps to highest levels since January with record high close in sight
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Nvidia Stock Price: 45% Rally Since April Fueled by 4 Key Catalysts
Nvidia Stock Price: 45% Rally Since April Fueled by 4 Key Catalysts
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Analyst Optimism Drives Rally

Loop Capital analysts argue that hyperscale cloud spending and "AI factory" investments could reach $2 trillion by 2028, driven by generative AI deployments1. The upgrade reflects growing conviction in AI demand alongside optimism around Nvidia's new gaming GPU launch and supply-chain improvements1.

The company announced the RTX 5050 graphics card Wednesday, priced at $249 and featuring a 60% performance improvement over its predecessor1. The gaming segment strengthening comes as Nvidia targets upgrade cycles from legacy users1.

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Recovery From Earlier Challenges

Nvidia's stock has surged 45% since hitting lows in April, when concerns about export controls and trade tensions weighed on shares1. The rally has brought the stock to 10.1% higher for the year, erasing steep declines that occurred earlier in 20252.

The chipmaker faced headwinds after President Trump imposed a ban on sales of H20 chips to China, resulting in a $2.5 billion revenue loss in the first quarter and an anticipated $8 billion loss in the second quarter34. Shares also dropped in January when Chinese startup DeepSeek launched a low-cost AI model that raised questions about demand for Nvidia's processors34.

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Policy Shifts Provide Tailwinds

Recent policy changes have improved the outlook. The Commerce Department eliminated the Biden administration's AI diffusion rule in mid-May, removing restrictions on which countries Nvidia can sell AI chips to1. A U.S.-China trade agreement also reduced tariffs from 145% to 30% for the U.S. and from 125% to 10% for China for 90 days2.

Since reporting first-quarter earnings on May 28 that exceeded Wall Street projections, Nvidia shares have gained over 9%, significantly outpacing the S&P 500's 3.5% rise during the same period34. CEO Jensen Huang has emphasized that the company's 90% market share in data center GPUs positions it to benefit from rising AI infrastructure spending5.

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Related
How will Nvidia's new gaming GPU impact its market dominance
What are the risks behind Nvidia's AI market valuation growth
Why did Loop Capital raise its price target for Nvidia now
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