Nvidia shares surge: the U.S. has granted a license to export its AI chips to the UAE
Boosting shipments of powerful processors will drive Nvidia shares up nearly 75%, says Loop Capital
Nvidia shares rose 1.8% in pre-market trading in New York after it was reported that the U.S. Commerce Department has authorized the shipment of its AI chips to the OEA. Microsoft said it was the first to receive the relevant export licenses for these processors from the Donald Trump administration. At the opening of trading, Microsoft's securities added 1%, while Nvidia's quotes jumped 2.3%.
The authorization from the Ministry of Commerce will allow Microsoft to ship the equivalent of an additional 60,400 A100 processors to the country for purchase from the chipmaker, but this time the shipments will include the more advanced GB300 Blackwell series. It paves the way for an expansion of the corporation's multi-billion dollar investments in the Gulf region, the Financial Times points out . Microsoft plans to increase the volume by supplementing the $7.3 billion invested in the UAE over the past three years with more than $7.9 billion between 2026 and 2029, the publication notes. $5.5 billion of that will go just for AI infrastructure and cloud technology.
Context
In May, Trump signed an agreement in the UAE to build a huge data center campus for AI in Abu Dhabi. G42, a Microsoft-backed company, is an important partner, but the project has faced restrictions on exporting powerful Nvidia chips, causing the deal to stall, The Wall Street Journal wrote.
Nvidia GPU shipments will double in the next 12-15 months, according to Loop Capital analyst Ananda Barua, quoted by CNBC. He predicts the growth of prices for these products. In this regard, Loop Capital raised the target on shares of the chipmaker from $250 to $350, which implies a 73% upside potential. "In 12 months, Nvidia will still be at the peak of the Blackwell cycle, and investors will be willing to pay an appropriate premium for that," the analyst believes. "We also believe that when investors realize what calendar year 2027 will be like, it will be clear that the $400 mark is well within reach," he added.
This article was AI-translated and verified by a human editor
