Shares of NVIDIA Corp. jumped 3.7% on Wednesday, extending their winning streak to a third straight session and posting their biggest one-day gain in more than a month. Investors rotated back into established technology names amid market volatility fueled by shifting developments surrounding the U.S.-Iran ceasefire and fading momentum in high-flying memory stocks.

President Donald Trump said an interim deal aimed at ending the war with Iran was “over” as the two sides exchanged missile fire for a second straight day, with tensions fueled by U.S. claims that Iran continued to keep the Strait of Hormuz trade route closed.

The rally in Nvidia stock was supported by a report suggesting that its struggling China business might finally be on the verge of a revival. The Information reported, citing people familiar with the matter, that the Chinese government  select AI companies to buy Nvidia’s H200 chips.

Chinese giants Alibaba Group, ByteDance, and DeepSeek are set to get the approval, according to the report.

NVDA’s China Business Set For Revival?

Nvidia’s China business has effectively dropped to zero, CEO Jensen Huang said recently, reiterating the details from the company’s latest results. Just two years ago, the company was a dominant chip supplier in the region, with $25 billion in sales from the market, representing 32% of its total revenue in 2024.

With the issue being a major overhang,  has lagged peers, causing some frustration among investors. NVDA is up 9.6% year-to-date, compared with the 87% gain in the sector benchmark . The Technology Select Sector SPDR Fund (XLK) gained 1.2% on Wednesday, rebounding from a 2.3% drop the previous day.

Nvidia's stock was down over 1% in overnight trading late Wednesday.

BofA Says Market Is Underappreciating NVDA

In a new note published Monday, Bank of America analysts argued that the market is underestimating Nvidia’s dominant position and its capacity to absorb pressures such as high memory prices and tech companies' development of custom chips.

“Our analysis suggests that at NVDA’s current valuation, investors might already be implicitly discounting an unjustified ~30–35% headwind to CY27/28 EPS estimates (effectively the delta between NVDA and growth peer forward P/E),” they wrote in their investor note.

“We strongly disagree with the EPS discount and see this as an enhanced Buy opportunity for a unique, durable growth franchise now trading at a 7-year low 18x forward P/E.”

NVDA Retail, Analyst View

BofA reiterated its ‘Buy’ rating and set a price target of $350, implying 78% upside from the stock’s closing price on Wednesday. Currently, 58 out of 61 analysts recommend ‘Buy’ or higher for NVDA, with their average price target of $301.62 implying a 48% upside.

On Stocktwits, the retail sentiment for NVDA shifted to ‘bullish’ as of late Wednesday, from ‘neutral’ the previous day, amid ‘high’ message volume.

“$NVDA the NVDA story isn’t over. When will people learn? Just be patient and ride the waves. Spoke to a Head of Infrastructure at a top Chinese company last week, and he said everyone is still trying to get their hands on NVDA chips,” said a trader.