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NVIDIA AI Chip. (Photo = NVIDIA) |
[Alpha Biz= Paul Lee] On June 24 (local time), U.S. stocks rallied as tensions in the Middle East eased following a ceasefire between Israel and Iran. Leading the charge was artificial intelligence (AI) chipmaker NVIDIA, whose stock surged 2.6%, nearing its all-time high.
NVIDIA closed at $147.90 on the Nasdaq, up 2.6% from the previous session. This marks the highest level since January 6, when the stock closed at its record high of $149.43 — just $1.53 short of a new peak.
Market sentiment for risk assets improved sharply following news of a ceasefire between Israel and Iran, which had been edging toward broader conflict after Israel's strikes on Iranian nuclear and military facilities.
Yahoo Finance attributed NVIDIA’s recent climb to its strong first-quarter earnings report released at the end of May. The company outperformed Wall Street expectations despite facing new U.S. export restrictions to China, one of its largest markets. Since then, NVIDIA stock has gained more than 9%, significantly outpacing the S&P 500's 3.5% rise over the same period.
Earlier this year, NVIDIA stock had faced pressure from escalating U.S.-China trade tensions and rising competition in China’s AI sector. In January, Chinese startup DeepSeek released a low-cost AI model, raising concerns over weakening demand. In April, a tariff announcement by former President Donald Trump added to investor worries, dragging the stock down to the low $94 range — its lowest in over a year.
Compounding challenges, U.S. restrictions led to a ban on NVIDIA’s H20 AI chip exports to China, potentially resulting in revenue losses of $2.5 billion in Q1 and an estimated $8 billion in Q2.
However, momentum reversed mid-May after NVIDIA secured a massive deal to supply hundreds of thousands of AI chips to Saudi Arabia and the UAE. The stock rebounded following its Q1 earnings, and earlier this month, NVIDIA briefly overtook Microsoft to become the world’s most valuable publicly traded company by market capitalization. Microsoft has since regained the top spot, with NVIDIA now ranked second globally.
The semiconductor sector broadly rallied as well. Intel jumped 6.4%, AMD rose 6.8%, Broadcom climbed 3.9%, and TSMC’s U.S.-listed shares gained 4.7%.
Investor appetite for U.S. tech stocks is rebounding. According to Bank of America, inflows into tech stocks last week hit their highest level since June 2024.
The Nasdaq 100 and the broader Nasdaq Composite both reached new highs, with the former hitting a record and the latter its highest level since February this year, further fueling the tech rally.
AlphaBIZ Paul Lee(hoondork1977@alphabiz.co.kr)
