Nvidia on the Rise: AI Boom Drives Stock Prices to Record Levels

Nvidia's stock price is experiencing a sensational surge as investors and analysts alike are optimistic about the opportunities from the artificial intelligence boom. On Wednesday, the stock held steady at $133, just below its previous record closing price of $135.58. A remarkable 12% increase in just one week marks the fifth consecutive day of gains for Nvidia, recovering more than fully from previous setbacks. This positive development is supported by a slew of favorable news: Wall Street analysts are reaffirming their buy recommendations for Nvidia, and KeyBanc forecasts fourth-quarter revenue of $7 billion from Nvidia's new Blackwell chips alone. Additionally, robust demand for older GPU models provides further tailwinds. At an AI summit in Washington, Nvidia recently set new benchmarks, announcing plans with Foxconn to build Taiwan's largest supercomputer. Foxconn also plans a megafactory in Mexico to manufacture Nvidia servers with the Grace Blackwell chips—a strategic move to reduce dependency on China amidst current trade disputes. Notably, Nvidia has recovered from the turmoil following disappointing quarterly results and reports of an alleged subpoena by the US Department of Justice. Previous stock losses were further exacerbated by trade tensions with China and the effects of a 10-for-1 stock split in June. The prospects for a new peak in Nvidia's stock are reinforced by positive developments in the semiconductor sector. For instance, Nvidia supplier TSMC exceeded Wall Street's sales expectations, underscoring the ongoing strong AI demand. As Patrick Moorhead, CEO of Moor Insights and Strategy, emphasizes, AI remains a hot topic, and growth in this sector seems assured for the coming months. Dynamic developments in the semiconductor industry suggest that Big Tech investments in AI hardware are far from over, as shown by the current WSTS sales data analyzed by JPMorgan. Young Liu, chairman of Foxconn, announced plans to expand capacities for Nvidia chips to meet the "crazy" demand—a comment that encapsulates the industry's enthusiasm for Nvidia's technology.