Nvidia (NASDAQ: NVDA) stock is back in the spotlight – and this time, it’s not just for its AI dominance but for its rebound on the back of the tariff shocker between US and China.
On May 12, 2025, shares of the semiconductor titan saw early gains, surging 4.74% in pre-market trading, before paring slightly to close at $116.67, down just 0.6% for the day.
The rebound follows a wave of encouraging news that has temporarily soothed investor concerns about geopolitical headwinds and margin pressure.
Trade Truce Ignites Optimism
The biggest driver of Nvidia stock’s spike on Monday – a surprise 90-day tariff rollback deal between the U.S. and China.
In a joint statement, both governments agreed to cut tariffs on each other’s goods from 125% to 10%, giving Nvidia and other chipmakers breathing room. With China accounting for billions in quarterly sales for Nvidia – especially for its AI-accelerated GPUs – this temporary relief is no small win.
While export controls tied to national security still loom large, this truce reduces immediate pressure on supply chains and reopens near-term access to a key market.
Nvidia Raises Prices Amid Tight Supply
In a bold strategic pivot, Nvidia has quietly raised prices by 10–25% on some of its most in-demand GPUs – including the H200, B200, and the upcoming RTX 5090. This move comes amid:
- Export restrictions tightening supply
- Soaring demand for next-gen AI chips
- Margin compression from production costs and inventory write-downs
By pricing up, Nvidia aims to protect its premium positioning and offset the rising cost of doing business in a volatile geopolitical environment.
But Headwinds Remain
Despite the day’s rally, Nvidia isn’t out of the woods.
- Export bans to China are still in place for its most advanced AI chips, and further policy shifts could reignite volatility.
- Competition from Chinese firms like Huawei is intensifying. These rivals are racing to close the performance gap and chip away at Nvidia’s dominance.
- Nvidia’s own Q1 earnings on May 28 loom large, with Wall Street projecting $201 billion in FY2026 revenue and watching gross margins closely after recent compression.
One key concern: internal chip development by Nvidia’s biggest clients (like Amazon, Google, and Meta) threatens to reduce dependence on Nvidia long-term – even if not immediately.
Why May 28 Matters
The upcoming earnings report could be a turning point.
Analysts want answers to the following:
- Can Blackwell chip production scale fast enough?
- How badly are export curbs impacting real sales volume?
- Are margins stabilizing after falling from 78% to around 70%?
- Will price hikes stick in a more competitive AI market?
If Nvidia delivers on all fronts, we could see another rally. But any stumble – especially on guidance – could trigger more downgrades, following the May 10 sell rating issued by Seaport Research Partners.
The Big Picture
Nvidia remains a force in the AI revolution, but the environment has changed.
Monday’s rebound shows that investors still have faith, especially when regulatory pressure eases. But with a $2.8 trillion market cap, expectations are sky-high – and any cracks in the story get amplified.
May 12 may have offered Nvidia some relief. But the real test comes May 28.
