Chip stocks jumped in overnight trading. SOXL up 3.2%; Nvidia up 2.8%; ARM Holdings, Microchip, Super Micro up around 2%.

Jefferies added Nvidia to its list of top stock picks on Tuesday. Equity analyst Blayne Curtis expects the ramp of Nvidia's Blackwell artificial-intelligence chips to drive the company's gross margin to somewhere between 70% and 80% this year, up from 61% as of its fiscal first quarter, which ended April 27.

"Going forward, we see a favorable setup for Nvidia in [the second half of 2025] as Blackwell Ultra ramps and Networking strength continues (NVLink and Spectrum-X). We also expect a smoother transition into NVDA's next-generation Rubin platform as it will have similar rack-type architecture as Blackwell," Curtis wrote in a research note.

Curtis has a Buy rating on Nvidia stock with a $185 target price.

Wall Street has generally been positive on Nvidia but investors might be cautious as the prospect of semiconductor tariffs looms. Potential levies on imported chips are under investigation by the U.S. Department of Commerce under Section 232 of the Trade Expansion Act of 1962, which allows the president to impose duties on imports that are considered a national security threat.

"Nvidia is only trading at 4% discount to our fair value. But I would say, from the point of view of wanting to have exposure to AI...Nvidia is still the bellwether for growth," wrote Dave Sekera, chief U.S. market strategist at Morningstar, in a research note.