Nvidia (NVDA) is on track for a new record closing price as investors remain optimistic about the continued growth of the artificial intelligence (AI) sector. On Wednesday, the stock traded flat at $132.65, just shy of its record close of $135.58 reached in June. Nvidia has seen a strong performance lately, marking its fifth consecutive day of gains before a slight downturn on Wednesday, with shares up 12% compared to last week.
The surge in Nvidia’s stock can be attributed to a stream of positive developments for the AI chipmaker. Wall Street analysts have reaffirmed their Buy ratings, with KeyBanc estimating that Nvidia’s revenues from its upcoming Blackwell chips could hit $7 billion in the fourth quarter. Demand for its older GPUs also remains robust, according to analysts from Wedbush, who noted a potential new influx of funding for AI startups that would further benefit Nvidia.
During its AI Summit in Washington, D.C., Nvidia highlighted the strength of its software offerings. In a notable partnership announcement, Nvidia and Foxconn revealed plans to construct Taiwan’s largest supercomputer during Foxconn’s annual technology event in Taipei. Additionally, Foxconn shared details about a mega-factory it is building in Mexico to assemble Nvidia servers powered by its Grace Blackwell chips, a move aimed at reducing Nvidia’s reliance on China amid escalating trade tensions.
Nvidia’s recent performance has helped to recover from earlier declines that followed the company’s second-quarter earnings report, where shares dropped after falling short of analyst expectations. Concerns over a subpoena from the U.S. Department of Justice, which Nvidia has denied, and fears of decreased demand from China due to rising trade tensions also contributed to earlier volatility. This was further exacerbated by Nvidia’s 10-for-1 stock split in June.
Positive news from the semiconductor sector also supports Nvidia’s stock potential. TSMC (TSM), one of Nvidia’s key chip manufacturers, reported sales that exceeded Wall Street expectations, reinforcing the outlook for strong AI demand.
“AI is hot,” stated Patrick Moorhead, CEO of Moor Insights and Strategy, adding that he anticipates continued growth in AI data center investments over the next year.
The overall semiconductor industry is experiencing significant gains, with sales rising 28% in August year-over-year and 15% compared to July, as per the latest WSTS data reviewed by JPMorgan. Young Liu, chair of Foxconn, indicated that the company is ramping up production to meet the “crazy” demand for Nvidia’s GPUs. Nvidia CEO Jensen Huang echoed this sentiment, describing the demand for its latest Blackwell chips as “insane.”
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