NVIDIA shares (NVDA) notched a record closing price as investors continue to bet on the Artificial intelligence boomputting the chipmaker in contention for the top spot as Wall Street’s most valuable company.
Shares rose 2.4% on Monday to above $138. Nvidia had already hit a record closing price of $135.58 in June.
Nvidia stock rose sharply in October, at one point posting six straight days of gains.
The stock’s rise began on October 2 after the announcement of a massive $6.6 billion funding round for OpenAI, the creator of ChatGPT. A large part of this funding will be sent back to Nvidiaas OpenAI’s growing energy needs will require more AI chips.
Nvidia shares continued their upward trajectory, fueled by an abundance of good news for the AI chip maker. Wall Street analysts reiterated their buy ratings on Nvidia shares last week. KeyBanc released a report estimating that Nvidia’s revenue from its new Blackwell chips alone will reach $7 billion in the fourth quarter, while demand for its older GPUs “remains extremely robust.” A potential new wave of funding for AI startups would also add to Nvidia’s coffers, Wedbush analysts said Tuesday.
Nvidia also demonstrated the solidity of its software offering during its AI Summit in Washington, DC The same day, Nvidia and Foxconn announced plans to build Taiwan’s largest supercomputer at Foxconn’s annual technology showcase in Taipei. Foxconn also provided details on a megafactory under construction to assemble Nvidia servers using its Grace Blackwell chips in Mexico, reducing Nvidia’s reliance on China amid heightened trade tensions.
Nvidia’s gains on Monday also move it closer to Apple’s place as the world’s most valuable company. The chipmaker’s market capitalization stood at $3.4 trillion as of Monday’s market close, while Apple’s was at $3.5 trillion. Apple, Microsoft and Nvidia have swapped places among the top three companies over the past year.
Nvidia’s rise more than reversed earlier declines following the company’s second-quarter earnings release.
Stocks sank in late August, after Nvidia failed to beat analysts’ expectations as much as investors had hoped. They fell further following a Bloomberg report that the company was subpoenaed by the US Department of Justice early September, which Nvidia denied. Fears of disruptions to Chinese demand Growing trade tensions with the United States also sent stocks lower. Nvidia’s recent volatility was amplified by its 10-for-1 stock split in June.
Other recent positive news in the semiconductor sector could contribute to Nvidia’s upside. TSMC (TSM), one of Nvidia’s chipmakers, announced sales above Wall Street expectations – another indication that demand for AI will remain strong in the near term.
“AI is hot,” Patrick Moorhead, CEO of Moor Insights and Strategy, told Yahoo Finance, adding, “I see continued growth in AI data center professions over the next 12 months.”
The chip sector’s gains indicate that big tech’s massive spending on AI hardware is far from over, despite fears of a slowdown on Wall Street.
Semiconductor industry sales rose 28% in August from a year earlier and 15% from July, according to the most recent WSTS data reviewed by JPMorgan (JPM). Young Liu, president of Nvidia’s server maker Foxconn (2354.TW), told Bloomberg Television in an interview Tuesday that the company is strengthening its ability to respond to a “crazy” request for Nvidia AI or GPU chips. Nvidia CEO Jensen Huang said in a CNBC interview last week that demand for Nvidia’s latest Blackwell chips has been “mad.”
Nvidia is expected to release its results on November 19. Wall Street analysts expect the company to report revenue of $33 billion, up 82% from a year earlier, according to Bloomberg consensus estimates. About 90% of Wall Street analysts covering the stock tracked by Bloomberg recommend buying Nvidia shares.
Laura Bratton is a reporter for Yahoo Finance.
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