Nvidia shares rose on Wednesday as easing geopolitical tensions lifted global markets.
The stock jumped as much as 3.1% to $183.57 in early trading before paring gains to around 1.8%.
The broader rally was strong. The S&P 500 surged 2.6%, while the Dow Jones Industrial Average climbed 1,384 points, or 2.9%. The Nasdaq Composite rose 3.3%.
The move followed comments from Donald Trump, who said he would suspend military action against Iran for two weeks.
“I agree to suspend the bombing and attack of Iran for a period of two weeks,” he said, adding that a ceasefire would depend on reopening the Strait of Hormuz.
Oil prices dropped sharply after the announcement.
West Texas Intermediate crude fell more than 17% to $93.42 per barrel, while Brent crude declined over 16% to $91.65.
Despite the rebound, Nvidia’s stock has struggled to break out.
Shares have traded in a narrow band between $165 and $195 since July, reflecting a period of consolidation after a multi-year rally.
The company had been one of the market’s top performers during the artificial intelligence boom, but momentum has slowed in recent months as macro and sector-specific concerns weighed on sentiment.
AI spending concerns weigh on sector
A key issue for investors is the sustainability of AI-related capital spending.
Large technology companies—often referred to as hyperscalers—have driven demand for Nvidia’s chips through aggressive investment in data centres and infrastructure.
However, questions are emerging about how long that pace can be maintained and when it will translate into meaningful returns.
Major customers such as Microsoft, Alphabet, and Amazon continue to spend heavily, but investors are increasingly reassessing the timeline for monetisation.
At the same time, software stocks have come under pressure amid concerns that artificial intelligence could disrupt traditional business models and compress margins.
Tech sector sees renewed optimism
Despite these concerns, Wall Street is turning more constructive on technology stocks following the recent pullback.
Goldman Sachs and Wells Fargo both said the correction has created a potential entry point for investors.
Wells Fargo upgraded the S&P 500 technology sector to favourable from neutral, citing strong fundamentals and easing valuation pressures.
“Corporate AI technology spending appears to have enough momentum to reach $650 billion this year. And questions about AI adoption are reasonable but we do not expect entire industries to disappear, nor for large unemployment,” the bank said in a note.
Goldman Sachs echoed that view, noting that the sector’s valuation relative to growth has fallen below that of the broader market, a rare occurrence.
“These factors have opened up an opportunity in the technology sector where growth rates remain strong, but valuations are now low,” Goldman said.
The more positive stance comes even as uncertainty persists.
Geopolitical risks and questions around AI’s economic impact continue to influence investor sentiment.
For Nvidia, the near-term trajectory is likely to remain tied to both macro developments and confidence in sustained AI demand, even as the latest rally offers temporary relief.
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