Nvidia’s Bull Market Still Has Room to Run

Nvidia's stock has fully recovered its losses from earlier in 2025—but where does it go next? Some warn of the semiconductor industry's cyclical nature, while others focus on the grand narrative of AI. But what if Nvidia’s real story isn’t just about the AI boom? What if it's about a geopolitical bet and a radical technological shift that could rewrite the rules of the chip industry?

As of the U.S. market close on May 15, Nvidia has fully recovered its year-to-date losses, recording a 0.41% gain for 2025 YTD.

The main driver behind Nvidia’s recent surge is a massive order from Saudi Arabia. The kingdom recently announced that its new company, Humain, plans to purchase hundreds of thousands of Blackwell chips over the next five years. The first batch — 18,000 GB300 chips (equivalent to about 36,000 GPUs, worth roughly $10–15 billion) — has already been confirmed with Nvidia.

The planned 500-megawatt AI data center will ultimately require 500,000 to 1 million GPUs, with a total projected cost exceeding $100 billion.

Saudi Arabia’s mega-order is just the beginning. A large deal from the UAE is still in the pipeline. According to multiple media sources including Bloomberg, the Trump administration is considering a deal allowing the UAE to import 500,000 advanced Nvidia chips per year through 2027, totaling over 1 million units. Of these, one-fifth would go to Abu Dhabi-based AI firm G42, while the remainder would be allocated to U.S. firms (like OpenAI) building data centers in the UAE.

Earlier in March 2025, the UAE’s National Security Advisor visited Washington to lobby for relaxed chip restrictions and pledged $1.4 trillion in U.S. investments over the next decade, covering AI, semiconductors, and other sectors.

Exporting such a large volume of high-end chips to the Middle East — especially to globally integrated nations like the UAE — can be seen as a softening of U.S. export restrictions on advanced AI chips. However, to prevent resale, the U.S. will likely impose “chip-tracking” regulatory measures in the future.

Nvidia’s Bull Run Could Last Much Longer Than Expected

Skepticism around Nvidia in the market mainly stems from two concerns: over-concentration of customers and the inherent cyclicality of the chip industry. It’s well known that semiconductors are cyclical stocks, typically going through four phases:

1. Upcycle (Surge in demand, supply shortage):

The current AI boom has driven a sharp increase in demand. Chip prices have risen, and manufacturers are enjoying expanded margins.

2. Peak Phase (Supply catches up, capex expansion):

Supply starts to meet demand, prices stabilize, and profit margins peak. Companies ramp up investment, building new fabs (e.g, TSMC’s $100B+ Arizona Fab 3).

3. Downcycle (Oversupply, price decline):

Overcapacity causes supply to exceed demand, inventories build up, chip prices drop, and margins shrink.

4. Bottom Phase (Inventory cleared, poised for recovery):

As inventories are absorbed, prices bottom out. Manufacturers cut capex and prepare for recovery.

First-quarter earnings reports indicate that the global AI narrative remains intact. Big Tech firms are maintaining strong capital expenditures (CapEx). Market forecasts for Big Tech CapEx in 2025 have risen 24%, and expectations for 2026 have also increased 26%.

This current chip cycle clearly remains between the upcycle and the peak phase. Nvidia’s most advanced chips are still in short supply. On top of demand from U.S. tech giants, new demand is emerging from the Middle East — along with possible resale interest.

This combination may significantly extend Nvidia’s bull cycle, far beyond current market expectations. At present, no one can clearly see where the top will be.

Potential Risks to Nvidia

Thanks to Nvidia’s relentless innovation, the GPU upgrade cycle for tech giants has shortened to just 2–3 years. This presents both risks and opportunities:

On one hand, shorter upgrade cycles could prolong Nvidia’s bull market. After U.S. tech firms complete their current round of GPU purchases, demand from the Middle East and other regions may kick in. By the time those needs are met, U.S. tech giants may already be entering the next upgrade cycle.

This could result in continuous wave-like demand rather than a traditional cyclical pattern.

However, shorter cycles also mean that tech firms must sustain high levels of capital expenditure. Whether this spending can translate into actual profits remains uncertain.

If AI monetization lags behind expectations, these firms might slow their CapEx, undermining the very logic of Nvidia’s bull thesis.

There are also geopolitical risks. Due to production capacity constraints, Middle Eastern nations won’t receive Nvidia chips until 2026. If geopolitical dynamics shift — for instance, a single Trump tweet — Middle East demand could vanish instantly.