Nvidia closed at a record high overnight after the US authorised the sale of high-powered chips to ten Chinese companies.
The authorisation came after Nvidia CEO Jensen Huang joined the US President on a trip to China to boost trade relations following a frosty trade war last year.
The US has reportedly approved the sale of H200 chips to ten Chinese companies, including Alibaba, Tencenet and ByteDance. This is half of the battle with Nvidia now requiring the Chinese to soften their approach to foreign-made chips.
The US approval has been taken well by the market, and Nvidia closed at $235.74 overnight – a fresh all-time closing high.
But the lack of an immediate deal with Nvidia sent shares lower in the US premarket.
“Chips are the backbone of tech advancement and have played a key part in the US president’s tariff wars as he’s pushed to alter the world trading map. But US consumers have been hurting, and with the Iran war piling pressure on the administration to do something to dampen down inflation, these talks could deliver crucial changes,” said AJ Bell head of financial analysis Danni Hewson.
“Nvidia is already flying high, but the ability to expand its footprint and serve more customers in China’s lucrative market would help lift sales higher. Investors appear to be betting this trip is going to deliver more than just photo ops as shares in the chip giant have continued to climb.”