Why NVIDIA May Continue to Rally Despite Trade Tensions and Export Risks

NVIDIA (NVDA) presents strong financial performance, record-setting revenue, and strong momentum in the AI sector in Q1 2026 earnings. The strong financial results, despite ongoing trade tensions and geopolitical crises, highlight the company’s ability to sustain growth during uncertainty. In addition, NVIDIA maintains a bullish trajectory fundamentally and technically, even while facing regulatory challenges, export restrictions, and tariff-related pressures. The stock price has broken record levels and continues to reach new highs due to its strong success. This article presents the fundamental and technical performance of NVIDIA to help investors understand the next move in the stock price.

Financial Performance of NVIDIA

The company reported strong revenue of $44.1 billion in Q1 2026, marking a 12% increase from Q4 2025 and a 69% year-over-year increase. Despite this growth, the stock faced uncertainty due to a $4.5 billion charge linked to excess inventory of H20 products. The US government’s new export restrictions to China blocked $2.5 billion in expected H20 revenue and sharply reduced overall margins.

NVIDIA’s core AI business continues to thrive, with explosive demand for its Blackwell NVL72 AI supercomputer. However, geopolitical risks and export restrictions cloud the short-term outlook. The company has also declared a quarterly cash dividend of $0.01 per share during Q1 2026 earnings, which highlights shareholder confidence.

The chart below shows an explosive increase in NVIDIA’s EPS and revenue since 2023. EPS has surged nearly 13,000% during the past 10 years, while revenue increased over 3,000%. This sharp increase reflects NVIDIA’s dominant role in the AI boom and growing demand for its data center products.

The divergence between EPS and revenue growth highlights improving margins and strong operational efficiency. This performance signals investor confidence, but it also raises expectations. Any export restrictions or inventory write-downs could trigger sharp stock reactions.

Moreover, the total assets and liabilities are observed in the chart below. It is found that the total assets are increasing sharply, accompanied by a steady increase in total liabilities. As of 2025, NVIDIA holds $111.60 billion in assets and $32.27 billion in liabilities. The widening gap reflects solid financial growth and efficient capital management.

The rapid expansion of assets suggests that NVIDIA is investing aggressively in AI infrastructure, R&D, and data center capabilities. Despite the growth in liabilities, the company maintains a healthy balance sheet. This strong financial position boosts investor confidence and provides flexibility for future innovation and expansion amid geopolitical challenges.

Strong Capital Efficiency and Resilience Amid Trade Risks

The return on invested capital reached 101.0% in 2025, as shown in the chart below. This increase in trend is noticeable after 2023, reflecting the company’s highly efficient use of capital. This surge signals that NVIDIA is generating exceptional returns from its investments, especially in AI infrastructure and data centers.

The spike boosts investor confidence and positions NVIDIA as a market leader in profitability. The high returns also suggest strong competitive advantages and disciplined financial management. This competitive edge makes NVIDIA an attractive long-term investment. The return on invested capital for Advanced Micro Devices (AMD), Intel Corp (INTC), Alphabet Inc. (GOOG), and Alphabet Inc. (GOOG) are 3.75%, -11.95%, 33.93% and 20.90%, respectively.

Latest Market Drivers for NVIDIA

NVIDIA’s stock shows strong price volatility as multiple macro and company-specific developments unfold. US markets are approaching a critical point with the start of earnings season. In addition, upcoming inflation data is expected to have a significant impact on stock prices.

The S&P 500 has increased over 20% since April, despite rising trade tensions. President Trump’s tariff threats on semiconductors, copper, and tech-related goods place direct pressure on NVIDIA, which relies heavily on global demand and international supply chains.

On the other hand, NVIDIA’s position is sensitive due to its exposure to China. CEO Jensen Huang’s upcoming visit to Beijing on 16 July draws attention amid ongoing US export restrictions. The US government has banned sales of NVIDIA’s high-end H20 chips to China, cutting into demand and raising political risks.

A bipartisan group of senators has already warned Huang against meeting entities tied to China’s military or those on the restricted export list. This scrutiny may raise investor concerns over NVIDIA’s ability to maintain Chinese market access without provoking further regulatory backlash.

Despite these headwinds, NVIDIA’s long-term fundamentals remain strong. The company generated $17 billion from China last year, which made up 13% of its total revenue. Its dominance in AI hardware, driven by the CUDA platform, keeps demand strong despite local competition from Huawei. However, if political pressure escalates, NVIDIA’s near-term stock performance may show strong fluctuations.

The market is now waiting for inflation data to be released on Tuesday. A higher-than-expected reading may delay interest rate cuts from the Fed, which could weigh on tech valuations. With Wall Street already pricing in multiple rate cuts, any deviation in inflation data may trigger a repricing. For NVIDIA, whose valuation is tightly linked to growth expectations, macro uncertainty and earnings season volatility could cause short-term swings.

Technical Performance of NVIDIA

Long-Term Parabolic Trend and Buy Signals

The monthly chart for NVIDIA shows that the stock price is moving in a parabolic fashion. The price has been consistently increasing over time with strong volatility. The chart below indicates that each major bull run begins when the stock reaches the overbought region, as seen by the RSI.

It is observed that when the RSI became overbought in February 2016, the stock price started to increase steadily. The market became overbought again in 2020, when the price was around $5. However, the price reached $34.58 by November 2021. The RSI again signaled an overbought condition in November 2023, with the price near $50. Following that, the stock surged to a record high of $152.85 in November 2024.

As of May 2025, the stock is once again in the overbought region, and the price has started to surge higher. This continued rise suggests strong bullish sentiment. Despite repeated overbought signals, the stock has maintained its upward trajectory. This behavior reflects the company’s strong financial performance, rapid developments in AI, and a competitive advantage over other companies.

The above chart also shows that since 2020, the stock has produced three strong buy signals. The first appeared in April 2020. The second buy signal came in October 2022 when a bullish hammer formed on the monthly chart. The third buy signal appeared in April 2025, also triggered by a bullish hammer. Since then, the price has risen from the $86 area to $164.

The long-term price chart shows that NVIDIA continues to follow a parabolic move. Based on the strong bullish price action, it is likely that the stock will continue to climb higher.

Understanding the Next Move in NVIDIA

To further understand the bullish price action in NVIDIA, the weekly chart below shows that the price has formed an ascending broadening wedge pattern, indicating strong volatility. The stock established long-term support near the $10 level and developed an inverted head and shoulders pattern with a neckline at $18.

The breakout above this neckline triggered a strong upward move, followed by a period of price compression. The recent break above the $153 area has sparked another strong rally, and the target of this move is likely to be significantly higher.

Despite strong long-term growth, the short-term trend also shows bullish momentum as the price breaks out above the ascending channel. The recent rebound since April 2025 was a V-shaped recovery, indicating further upside potential. The bottom near the $86.61 area suggests that the breakout above the $153 level has initiated the next strong rally in NVIDIA. This rally is likely to continue higher. Investors may consider buying NVIDIA stock on pullbacks to capitalize on this ongoing upward momentum.

Risk Analysis

NVIDIA faces several risks despite its strong financial and technical performance. The export restrictions imposed by the US government may have a significant impact on NVIDIA’s revenue, particularly in China, which accounts for 13% of NVIDIA’s total sales. Moreover, CEO Jensen Huang’s upcoming visit to China adds political sensitivity, especially under scrutiny from US lawmakers. Any further restrictions or diplomatic tensions may lead to market uncertainty and short-term price volatility.

On the other hand, macroeconomic conditions also pose risks to NVIDIA’s stock price. Investors await US inflation data and Q2 2026 earnings, which may influence market direction. Additionally, uncertainty from President Trump’s tariff policies continues to impact the broader market. These uncertainties, along with ongoing geopolitical tensions in the Middle East, have affected the energy markets. The energy sector maintains an indirect but meaningful relationship with the tech sector.

Final Words

NVIDIA continues to show exceptional strength in financial and technical performance. The company delivered strong revenue growth in Q1 2026 and maintained high capital efficiency. Its dominance in the AI and data center markets supports its long-term momentum. The stock broke out above $153 and shows a parabolic trend, with technical indicators pointing to more gains. Despite trade tensions and export restrictions, NVIDIA’s fundamentals remain solid. The company holds a strong balance sheet, invests heavily in innovation, and generates record returns on capital.

However, the export controls and political developments, especially with China, may trigger sharp volatility. Inflation data and Fed policy may also affect tech valuations. NVIDIA’s position as a global AI leader provides strong support for long-term investors. The recent breakout and V-shaped recovery suggest further upside potential. Investors may consider buying on pullbacks to $100-$130 as the stock continues its upward trajectory.