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Nvidia (NVDA) shares are in focus this morning following reports the U.S. has reached a preliminary deal that will enable the United Arab Emirates to import 500,000 of its latest AI chips per year.
For now, the arrangement is expected to remain in place through 2027, but there’s a possibility that it may eventually be extended through the end of this decade, the reports added.
At the time of writing, Nvidia stock is up more than 40% versus its 1-month low.
Why Nvidia Stock Could Get a Boost From UAE Deal
The preliminary agreement reportedly allows NVDA to sell 100,000 of its most advanced AI chips per year to the Emirati tech giant, G42.
According to sources that spoke with the New York Times on condition of anonymity, the remaining 400,000 chips will go the U.S. titans with significant footprints in the United Arab Emirates like Microsoft (MSFT) and Oracle (ORCL).
The UAE deal is pivotal for Nvidia stock as it enables the company based out of Santa Clara, California to generate billions in additional potential revenue.
NVDA has been largely focused on the U.S. and China so far, with more than half of its annual revenue coming from those two economies – but this pending agreement helps diversify the firm’s customer base and positions it better for sustainable growth over the long term.
KeyBanc Sees Significant Further Upside in NVDA Shares
Despite a significant rally in recent weeks, Nvidia shares remain worth owning as the AI darling is “uniquely positioned to benefit from AI/ML secular data center growth,” argued John Vinh – a KeyBanc analyst in a research note on Thursday.
Deals worth billions of dollars that President Donald Trump has secured for the AI darling during his ongoing visits of the Gulf states make NVDA all the more exciting to own at current levels, he added.
Trump’s visit to Saudi Arabia also brought Nvidia a multi-year AI infrastructure deal with Humain this week. Vinh’s $190 price target on the AI stock signals potential upside of another 40% from current levels.
Wall Street Remains Bullish as Ever on Nvidia for 2025
Other Wall Street analysts are keeping bullish on Nvidia stock amidst recent developments as well.
The consensus rating on NVDA currently sits at “Strong Buy” with the mean target of about $166 indicating potential upside of more than 20% from here.
