Nvidia Shares Clear Critical Obstacles Amid Strong Demand Signals

Investors in Nvidia have reason for renewed optimism. Recent pressures stemming from potential export restrictions and questions about the sustainability of the artificial intelligence boom have begun to ease. A powerful revenue signal from its primary manufacturing partner, coupled with favorable regulatory developments from Washington, has shifted momentum, providing substantial new arguments for the bullish case.

Significant relief has emerged on the political front. U.S. lawmakers have removed a contentious proposal from the defense budget that would have severely restricted chip exports. The proposed legislation, known as the GAIN AI Act, would have mandated companies like Nvidia and AMD to prioritize U.S. customers before selling products to other nations.

This potential barrier was eliminated following a Wednesday meeting between CEO Jensen Huang and President Donald Trump. For Nvidia, this development helps secure its access to global markets for the foreseeable future, removing the threat of new bureaucratic hurdles that could have hampered sales.

Supply Chain Data Confirms Robust Demand

The most telling indicator for Nvidia's near-term prospects arrived from Taiwan. Foxconn, the chip giant's central manufacturing partner, reported a 26 percent year-over-year revenue surge for November. The company attributed this growth primarily to the unbroken momentum in "AI server racks."

This figure holds crucial importance for Nvidia shareholders. As the manufacturer of the servers housing Nvidia's chips, Foxconn's revenue is viewed as a direct gauge of real-world demand for AI infrastructure. The data effectively counters recent fears that the investment boom from major cloud providers might be waning. Demand for data center hardware evidently remains elevated.

Should investors sell immediately? Or is it worth buying Nvidia?

Competitive Landscape Intensifies

Despite the positive news flow, Nvidia must continue to defend its technological leadership. The speed at which the competitive environment can shift was highlighted in China, where local rival Moore Threads soared over 400 percent in its market debut. Beijing is aggressively advancing semiconductor self-sufficiency to establish alternatives to Nvidia chips, which are limited by U.S. sanctions.

In response, Nvidia is advancing its strategic position by expanding its ecosystem through several key initiatives:

• Synopsys Stake: A $2 billion investment in the software specialist aims to secure new design workflows.
• AWS Integration: Amazon Web Services is embedding Nvidia's NVLink technology more deeply into its own cloud infrastructure.
• Platform Enhancement: The release of CUDA 13.1 represents the largest platform update in two decades, designed to further boost hardware efficiency.

The stock currently trades at 156.24 euros. Despite an advance of approximately 16 percent since the start of the year, the share price remains about 13 percent below its 52-week high from November.

Market Outlook

The combination of confirmed demand from the Foxconn report and the removal of near-term regulatory risks stabilizes the short-term outlook. Investors are now focusing on the long-term defense of Nvidia's estimated 80 percent market share. The next significant catalyst will likely emerge from the GTC conference in March 2026, where the company traditionally unveils its new technology roadmap. Until then, the upcoming quarterly results at the end of February will provide further insight into the business trajectory.