(Image credit: Shealah Craighead via Wikimedia Commons, CC BY 2.0)U.S. markets displayed a mixed performance on Wednesday, with the Dow Jones Industrial Average dipping by 0.25%, while the tech-heavy Nasdaq Composite rose 0.75%, closing at 19,150 points. The S&P 500 remained relatively flat. The divergence was largely attributed to significant gains in the technology sector, particularly among semiconductor companies, following the announcement of substantial U.S.-Saudi investment deals during President Donald Trump's visit to the Middle East.
Nvidia's stock surged 5.6% to close at $129.93 per share after the company announced a major deal to supply advanced AI chips to Humain, a Saudi Arabian AI startup backed by the kingdom's Public Investment Fund. The agreement involves delivering hundreds of thousands of high-performance processors to power a 500-megawatt AI data center initiative over the next five years.
Advanced Micro Devices (AMD) also benefited, forming a $10 billion strategic partnership with Humain to provide semiconductors for the same initiative . Super Micro Computer announced a multiyear $20 billion partnership with Saudi Arabia’s DataVolt for AI infrastructure projects in both Saudi Arabia and the U.S.
These developments are part of a broader $600 billion package of U.S.-Saudi deals focusing on defense, artificial intelligence, and economic cooperation unveiled during the investment forum in Riyadh. President Trump praised Saudi Arabia and Crown Prince Mohammed bin Salman for their commitment to enhancing bilateral ties through these investments.
Analysts view these deals as a significant boost for U.S. tech companies, especially in light of recent export restrictions on AI chips to China. Bank of America estimates that Saudi AI initiatives could generate $3–$5 billion in annual chip sales, potentially rising to $15–$20 billion over multiple years. Analyst Vivek Arya highlighted sovereign AI as a growing segment, projecting it could represent a $50 billion annual market globally.
The influx of Saudi investments into U.S. technology firms is seen as a strategic move to diversify revenue streams and mitigate the impact of geopolitical tensions on the semiconductor industry.
While tech stocks rallied, other sectors experienced varied performances. The dollar index edged lower by 0.21% to 100.80 points, and gold prices fell 1.91% to $3,182.22, indicating a shift in investor preference towards equities amid positive economic indicators, including easing inflation and improved trade relations between the U.S. and China.
As the U.S. and Saudi Arabia deepen their economic ties through these substantial investments, market participants will closely monitor the long-term impacts on the technology sector and broader market dynamics.
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