NVIDIA's AI Dominance Takes Off: How Policy Shifts and Saudi Deals Fuel a $160+ Surge

The AI chip wars are intensifying, but NVIDIA (NASDAQ: NVDA) is turning geopolitical headwinds into tailwinds. A perfect storm of Trump-era policy reversals, $15 billion Saudi infrastructure deals, and tax-driven buybacks positions the company for a 46% earnings surge. With shares at $135—a 22% discount to their all-time high—this is a rare moment to buy the AI leader before Wall Street’s $160+ target materializes.

Policy Pivot: Trump’s Export Reversal Opens the Floodgates

The Trump administration’s abrupt reversal of Biden-era AI export controls has been a game-changer. By scrapping the restrictive “AI Diffusion Rule,” the U.S. greenlit $600 billion in Middle Eastern tech partnerships, with NVIDIA at the epicenter.

• Saudi Arabia’s HUMAIN venture: A $15–20 billion AI data center rollout will deploy 500,000 NVIDIA GPUs over five years, including 18,000 Grace Blackwell supercomputers.
• UAE deal: Over 1 million AI chips will bypass prior China-linked restrictions, locking in long-term demand.

The shift from broad sanctions to bilateral negotiations ensures NVIDIA avoids the “patchwork regulatory nightmare” analysts feared. Instead, it’s leveraging geopolitical ties to dominate markets Biden’s rules would have sidelined.

Tax Breaks Supercharge Buybacks and Growth

Trump’s 2017 Tax Cuts and Jobs Act (TCJA) slashed corporate rates to 21%, freeing up cash for buybacks. Goldman Sachs estimates U.S. firms will spend $1.05 trillion on buybacks in 2025, a record fueled by post-tax profit surges. NVIDIA has already returned $15.4 billion to shareholders since 2024, with a fresh $50 billion buyback authorization in the works.

• Why this matters: Buybacks reduce shares outstanding, boosting EPS. NVIDIA’s EPS is projected to hit $4.41 in fiscal 2026, a 147% jump from 2024 levels.
• Wall Street consensus: Analysts at Bank of America and Citi see the stock hitting $160 by year-end, citing Saudi deals and “irreplaceable” AI chip leadership.

China’s Restrictions? NVIDIA’s Playing Chess, Not Checkers

Critics worry about China’s push for self-reliance via Huawei’s Ascend chips. But NVIDIA’s strategy is surgical:

1. Downgrade for China: Offer H20 and L40 chips compliant with U.S. rules, keeping 70% of the market while avoiding penalties.
2. Out-innovate: The Blackwell Ultra (GB300) and upcoming Rubin architecture (3.3x faster than Blackwell) ensure no competitor can match NVIDIA’s performance.
3. Sovereign AI partnerships: By building data centers in Saudi Arabia, Indonesia, and India, NVIDIA avoids reliance on China while complying with U.S. export rules.

The Bottom Line: Why Buy Now?

• $135 is a fire sale: NVIDIA’s P/E of 40 is half its 10-year average. A $160 target assumes a 26.4 P/E, still conservative given its AI monopoly.
• 46% earnings growth is table stakes: Q1 2026 EPS of $0.89 is just the start. The $500 billion Stargate Project and agentic AI boom promise years of upside.
• Risks are priced in: Trade tensions? Already reflected in the dip. China’s tech push? NVIDIA’s performance gap makes it unstoppable.

Act Now—The AI Revolution Isn’t Waiting

The stars are aligned for NVIDIA: geopolitical tailwinds, $15 billion in locked-in deals, and a tax system primed for buybacks. At $135, this is the last chance to buy AI’s king before the $160+ rally begins.

Recommended Action:
- Buy NVDA at $135 with a $160+ target.
- Hold for 12–18 months as AI infrastructure spending hits $1 trillion by 2028.

The AI revolution is here—and NVIDIA is writing the rules. Don’t miss the ride.