nvidia stock surges as trump revokes biden ai policy

2025-01-22 nvidia

Washington D.C., Wednesday, 22 January 2025.
Nvidia’s stock is experiencing a notable increase following President Donald Trump’s decision to revoke an AI development order initially set by President Joe Biden. The revocation of Executive Order 14110, which originally required AI developers to submit safety test results to the U.S. government, has been received positively in the financial markets. As a result, Nvidia’s stock rose approximately 3%, with analysts maintaining a strong buy recommendation. Trump’s move aligns with a broader strategy of reducing regulatory constraints on the industry, potentially strengthening Nvidia’s market position in the AI sector. The company is now preparing to report its fourth-quarter results on February 26, 2025, amid optimism about its performance. The shift in policy has also sparked broader gains in the tech sector, with other chipmakers also seeing stock increases.

Market reaction and analyst perspective

Nvidia stock experienced a notable 3% increase following Trump’s revocation of Executive Order 14110 [2]. Wall Street maintains a strong buy rating on NVDA, with analysts setting an average target price of $173.08, suggesting a potential upside of 25% [2]. UBS Global Research analyst Timothy Arcuri expresses confidence in Nvidia’s upcoming performance, stating the concerns about a near-term slowdown are overstated [2]. The company’s market capitalization remains above $1 trillion, despite being down 0.4% year-to-date as of January 21 [4].

Policy shift implications

The revoked order, signed by Biden in 2023, had mandated AI developers to submit safety test results to the federal government before public releases [3]. The Republican Party characterized the original order as dangerous, claiming it hindered AI innovation [2]. This regulatory reset marks a significant shift in federal oversight of artificial intelligence [3]. The immediate impact on chipmakers remains unclear, though the move aligns with Trump’s historically pro-industry stance on advanced technologies [4].

Broader market impact

The policy change has created ripple effects across the semiconductor sector, with other major players like Broadcom and Taiwan Semiconductor Manufacturing Co. seeing gains exceeding 1% [4]. This comes as Nvidia continues to advance its AI initiatives, having recently released NIM Microservices aimed at ensuring safety and trust in AI applications [6]. The company is actively expanding its presence in various sectors, particularly in healthcare and life sciences [6].

Bronnen

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