Shares of Nvidia rose approximately 0.9% to $191.75 in early Tuesday trading, extending a recent rebound as investors reacted to reports of a potential U.S. policy shift. According to media outlets, the administration is considering exemptions from upcoming chip tariffs for large technology companies building artificial intelligence data centers, including Amazon, Google, and Microsoft.
Policy Uncertainty and Supplier Strength
Administration officials noted the plans remain fluid and have not been finalized, leaving some uncertainty in the market. Concurrently, Taiwan Semiconductor Manufacturing Company (TSMC), Nvidia's primary manufacturing partner, reported robust January revenue of roughly NT$401.26 billion. This figure represents a significant 19.8% increase from December and a 36.8% year-over-year gain.
The positive news flowed through the broader chip sector. Advanced Micro Devices (AMD) shares climbed 1.2%, Broadcom (AVGO) gained 0.9%, and U.S.-listed shares of TSMC advanced 2.1%.
Broader Market Context and AI Spending
The trading session also saw investors digest softer economic data, including unexpectedly flat U.S. retail sales for December. However, the overarching narrative focused on the massive capital expenditure driving the AI sector. Analysts note that leading cloud companies are investing well over $100 billion annually in capital spending to build out AI infrastructure.
Nvidia's stock has become a key barometer for AI investment health, with its valuation sensitive to factors affecting data center construction costs and pace. The reported tariff carve-out, while not guaranteed, is seen as a potential tailwind for the chip industry's profitability.
Market participants now await Nvidia's upcoming financial results, scheduled for release on February 25, for a clearer signal on the company's performance and the sector's trajectory. The report will cover fourth-quarter and full-year fiscal 2026 results.
