Nvidia's AI Breakthrough and Technical Uptrend Signal a Buy Amid Tariff Headwinds

Nvidia (NVDA) is in the midst of a historic transformation, driven by its dominance in AI infrastructure and a technical breakout that's sent its stock soaring. Despite U.S.-China trade tensions and export restrictions, the company's Q1 results and strategic moves underscore a compelling investment case. With BlackRock's bullish outlook on U.S. equities aligning with Nvidia's fundamental and technical strengths, investors should act now to capitalize on AI's secular growth.

The Fundamental Case: AI Leadership and Explosive Growth

Nvidia's Q1 FY25 earnings revealed staggering momentum. Revenue hit $26 billion, up 262% year-over-year, while Data Center revenue surged to $22.6 billion—a 427% YoY jump. This segment, fueled by demand for generative AI training on its Hopper and Blackwell platforms, now accounts for 87% of total revenue. The Blackwell architecture, launched to enable trillion-parameter AI models, is already integrated into partnerships with Toyota (autonomous driving) and cloud giants like AWS and Microsoft.

Even as CEO Jensen Huang lamented $8 billion in lost revenue due to U.S. export bans on H20 chips to China, the company's free cash flow hit $14.9 billion—proof of its financial resilience. The $10-for-1 stock split and dividend hike (now $0.01 post-split) have made shares more accessible to retail investors, amplifying the retail FOMO effect.

Technical Breakout at $140: The Momentum Play

Nvidia's stock has been locked in a multi-year consolidation above $100, but recent earnings and AI catalysts have unlocked a breakout. The stock is now trading near $140, with momentum indicators like RSI and MACD signaling a sustained upward move.

Historical data reveals caution. A backtest from 2020–2025 showed an average return of -1.30% when holding NVDA until a 10% gain, with a maximum drawdown of -41.83%. While this highlights the strategy's high volatility, the current breakout's strength—breaking a multi-year resistance at $140—and AI's secular growth suggest improved risk-reward dynamics today.

The $140 level is critical: it represents a breakout above resistance that's held since early 2022. A close above this threshold could trigger a 30% rally to $180 within six months, aligning with analysts' $170-200 price targets.

BlackRock's Bullish U.S. Equity Thesis: A Tailwind for Tech Leaders

BlackRock's Q2 outlook highlights the AI theme as the key driver of U.S. equity outperformance. The firm's overweight stance on tech stocks—driven by companies like Nvidia that are “redefining the future of computing”—aligns with its belief that AI productivity gains will offset macroeconomic risks. Even with tariffs, BlackRock sees supply chains as too entrenched to shift quickly, making U.S. tech giants like NVDA “hard to displace.”

The firm's emphasis on “hard economic rules” and its $500 billion Stargate Project partnership with Nvidia underscore the strategic importance of AI infrastructure. BlackRock's confidence in U.S. equities, despite near-term tariff volatility, provides a macro backdrop that supports Nvidia's valuation.

Risks? Yes. But the Upside Outweighs Them

Critics point to China's $15 billion in lost sales and rising competition from AMD's MI300X and Intel's Ponte Vecchio. Yet, the Stargate Project—a $500 billion initiative with European governments—suggests geopolitical allies are doubling down on AI. Meanwhile, the $28 billion revenue guidance for Q2 (despite export bans) shows management's confidence in navigating headwinds.

The real risk? Missing out. With global enterprises spending $220 billion annually on AI infrastructure by 2025 (per Microsoft, Alphabet, and Meta's capex plans), Nvidia's GPU leadership and AI software stack (NVIDIA AI Enterprise 5.0) are irreplaceable.

Conclusion: Buy Now to Ride the AI Supercycle

Nvidia is the poster child of the AI revolution—a company with both the fundamentals to grow and the technical momentum to outperform. BlackRock's bullish stance on U.S. tech, coupled with NVDA's earnings resilience and $140 breakout, make this a rare convergence of value and momentum.

Investors who act now can own a stock at the heart of a $10 trillion AI market—despite tariffs—while the technical chart signals a new leg higher. The risks are real, but the secular tailwinds of Agentic AI, quantum computing, and trillion-parameter models are too powerful to ignore.

Action:
- Buy NVDA shares at current levels, targeting $180 by early 2026.
- Set a stop-loss below the $120 support zone, given historical volatility seen in past drawdowns.
- Stay long-term: AI's growth curve will outlast near-term trade disputes.

The future of computing is here—and it's running on NVIDIA. Don't miss the ride.