The recent rebound in shares of Nvidia is a sign that investors do not expect a worst case outcome from the trade negotiations between the U.S. and other major economies, especially China, according to Fundstrat co-founder Tom Lee. The firm’s head of research told CNBC’s Bob Pisani at the Future Proof conference in Miami on Monday that he found it notable that President Donald Trump has been less vocal about China when discussing trade policy in recent weeks. While Lee said he didn’t know for sure what was happening between the White House and Beijing, the lack of rhetoric could be a sign that negotiations are progressing and “that would probably explain why Nvidia has been outperforming, as well,” he explained. Nvidia closed at $106.98 per share on March 10, its lowest since September. Since then, Nvidia has risen in three out of five sessions, for a total gain of more than 11%. “If there was a global trade war, and we risked a recession, Nvidia would still be derating,” Lee said. “The ‘P/E’ should be coming down because all of a sudden everyone wouldn’t even know what the ‘E’ looks like. So the fact that has stabilized I think is very telling,” he added, referring to the price-to-earnings ratio. NVDA 1M mountain Shares of Nvidia have rebounded off their March 10 lows. Trump has imposed additional 10% tariffs on Chinese goods on two separate occasions already since he took office. China has retaliated with tariffs of its own, and the Chinese Embassy in the U.S. said earlier this month that it was ready for a “tariff war, a trade war or any other type of war .” But the situation has not escalated beyond those comments over the past 10 days. That is different from the tariff back-and-forth with Mexico and Canada, which has seen frequent public changes. Trump said Monday that Chinese President Xi Jinping would visit the U.S. in the not too distant future, Reuters reported, which may also hint at progress in trade talks. Nvidia is a semiconductor company whose advanced chips have made it one of the key players in artificial intelligence and one of the biggest stocks in the world by market capitalization. Shares of the company, which is hosting a developer conference in California this week, are down 11% year to date.
