Nvidia and AMD shares jump, leaving DeepSeek impact behind; here's what happened and what investors should know

Nvidia and AMD stocks surge after major AI deals in Middle East boost investor confidence- Nvidia and AMD shares saw a strong rally on May 14, 2025, as investors responded positively to new developments in the global AI landscape. The gains were driven by fresh billion-dollar partnerships in the Middle East, a major stock buyback plan from AMD, and rising demand for AI chips outside China. Together, these factors signaled a potential long-term growth path for U.S. chipmakers that had been under pressure earlier this year.

According to Reuters, Nvidia and AMD are now part of a strategic push by Saudi Arabia to become a major hub for artificial intelligence development. The news sent AMD stock up 6.4%, while Nvidia also posted solid gains as investors showed renewed confidence.

How are Nvidia and AMD involved in Saudi Arabia’s $10 billion AI infrastructure plan?

One of the biggest drivers behind the stock surge was the announcement of a strategic deal with Humain, the artificial intelligence arm of Saudi Arabia’s Public Investment Fund (PIF). Both Nvidia and AMD will supply hundreds of thousands of AI chips over the next five years to help power large-scale data centers in the region.
The planned data centers will support up to 500 megawatts of computing power—part of a much broader $10 billion AI investment across Saudi Arabia and the United States. These centers are expected to handle complex AI workloads, from model training to real-time applications in areas like healthcare, defense, and finance.

The partnerships were first reported by Barron’s and Investor’s Business Daily, confirming that the chipmakers are now aligning themselves with sovereign-backed AI growth projects, which could become a steady source of demand.

What does AMD’s $6 billion share buyback mean for investors?

In addition to the Middle East deals, AMD announced a new $6 billion stock buyback program, which adds to its existing $4 billion repurchase authorization. That brings the total buyback authority to $10 billion. According to Reuters and Barron’s, this move reflects AMD’s confidence in its financial health and future growth. By buying back its own shares, AMD aims to return value to shareholders and reduce the number of shares in circulation—often a signal that the company sees its stock as undervalued. The buyback helped fuel AMD’s 6.4% stock jump on May 14, reinforcing the idea that the market sees this as a sign of strength and long-term planning.

Is chip demand shifting from China to the Middle East?

Another key factor driving the rally is a growing shift in global demand for AI chips. The U.S. government is reportedly considering allowing the United Arab Emirates to import more than 1 million Nvidia chips, a development that highlights how geopolitical focus is moving away from China.

Previously, U.S. chipmakers like Nvidia relied heavily on Chinese customers. But trade restrictions and rising tensions have made that market less reliable. Now, as Middle Eastern countries increase investment in AI infrastructure, companies like Nvidia and AMD are seeing new demand emerge in geopolitically safer regions.

This trend, reported by Investor’s Business Daily, points to a strategic diversification that could help reduce exposure to international risks.

How did earlier competition from DeepSeek affect these chip stocks?

It’s important to remember that earlier this year, both Nvidia and AMD took a big hit when reports emerged that Chinese AI lab DeepSeek had developed models that matched or exceeded U.S. capabilities—at a fraction of the cost.

That news triggered a sharp sell-off. Nvidia’s stock dropped 17% in one day, wiping out about $600 billion in market value, according to Yahoo Finance and CBS News. AMD also felt the pressure as concerns about global competition grew.

Now, the recent rebound marks a potential recovery from that slump. New deals, expanded markets, and corporate strategies like buybacks are reshaping investor expectations.

Could sovereign AI projects become a long-term growth engine?

According to analysts quoted by Barron’s, sovereign-backed AI projects like Saudi Arabia’s Humain initiative could represent a $50 billion annual global market in the coming years. This suggests that the current deals may only be the beginning of a longer-term opportunity.

As more countries build national AI capabilities, companies like Nvidia and AMD are positioning themselves as key suppliers. Their chips are essential for training large AI models, managing huge datasets, and running next-gen applications in real time.

The recent stock surge shows that investors are taking notice of this shift—and betting on the continued expansion of AI infrastructure on a global scale.

FAQs:

Q1: Why did Nvidia and AMD stock rise suddenly?
They gained after announcing big AI chip deals with Saudi Arabia and AMD’s $6 billion buyback plan.

Q2: What is Humain’s role in the AI chip market?
Humain, backed by Saudi Arabia’s PIF, is building massive AI data centers powered by chips from Nvidia and AMD.