NVIDIA shares (NVDA) rose more than 2% on Wednesday after an industry report forecast “unprecedented” levels of investment in artificial intelligence, a bullish sign for the AI chip maker.
Consulting firm Bain Annual Technology Report released plans Wednesday that companies will need to make “unprecedented levels of investment” in technology infrastructure to stay on top of the artificial intelligence boom.
“If large data centers currently cost between $1 billion and $4 billion, data center costs in five years could be between $10 billion and $25 billion,” the report said.
The company’s research also indicates that data center operators and hardware providers will enjoy a near-term boon as businesses and governments splurge on IT capacity.
“Nvidia, for example, projects $10 billion in revenue from sovereign government investments in AI in 2024, up from zero last year,” the report said.
Over the past few months, Wall Street has looked for clues about how long massive infrastructure spending will last and whether AI chip buyers will return on investment.
Nvidia stock extended its gains from the previous session on Wednesday after CEO Jensen Huang appeared to be done selling shares for now.
Over the past few months, Huang has cashed in about $713 million in stock. as part of a plan sell 6 million shares by March 2025 – a goal it achieved ahead of schedule.
Despite the sale of his shares, Huang continues to hold his position as the company’s largest shareholder.
Nvidia shares are up about 20% since September 6. The stock has gained more than 150% since the start of the year.
Ines Ferre is a senior economics reporter for Yahoo Finance. Follow her on @ines_ferre.
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Correction: A previous version of this article contained an incorrect spelling of Jensen Huang’s name. We regret the error.