TLDR:
- Nvidia stock rose 4% on Tuesday, marking its fifth consecutive day of gains
- Wall Street analysts remain bullish, with KeyBanc raising FY2025 sales outlook
- Foxconn is building the world’s largest factory to assemble Nvidia’s GB200 servers in Mexico
- Nvidia is showcasing its AI software offerings at its AI Summit in D.C.
- The semiconductor industry as a whole is seeing strong growth, with sales up 28% in August from last year
Nvidia, the leading AI chip manufacturer, continues to ride a wave of positive momentum as its stock rose 4% on Tuesday, marking the fifth consecutive day of gains.
The company’s shares have surged nearly 14% over the past week and an impressive 190% from the previous year, reflecting the ongoing enthusiasm surrounding artificial intelligence technologies and Nvidia’s dominant position in the market.
Wall Street analysts remain bullish on Nvidia’s prospects, with several firms reiterating their Buy ratings on the stock this week. KeyBanc analysts have raised their fiscal year 2025 sales outlook for Nvidia from $128.5 billion to $130.6 billion, surpassing the Wall Street consensus estimate of $125.6 billion.
The analysts expect Nvidia’s new flagship Blackwell AI chips to contribute $7 billion to fourth-quarter revenues.
The demand for Nvidia’s AI chips remains robust, with KeyBanc noting that even as production of the new Blackwell chips ramps up, demand for the company’s prior AI chip models – H100s and H200s – continues to be strong.
This sustained demand is likely to be further fueled by a potential new wave of funding for AI startups, as reported by The Information. The recent $6.6 billion funding round for OpenAI is expected to drive increased investments in the AI sector, which would, in turn, boost demand for Nvidia’s chips.
Foxconn, the Taiwan-based electronics manufacturer, announced plans to build the world’s largest factory for assembling Nvidia’s GB200 servers in Mexico. Foxconn’s chair, Young Liu, described the demand for Nvidia’s latest AI chips as “crazy” during an annual event in Taipei.
This move is expected to reduce Nvidia’s reliance on China amid rising trade tensions and ensure a stable supply chain for its products.
Nvidia is also working to showcase its capabilities beyond hardware. At its AI Summit in Washington D.C., the company is highlighting the strength of its AI software offerings, aiming to demonstrate that it’s more than just a chipmaker. This strategy aligns with Nvidia’s efforts to position itself as a comprehensive AI solutions provider.
The positive momentum for Nvidia is part of a broader trend in the semiconductor industry. JPMorgan cited WSTS semiconductor industry data showing that sector-wide sales rose 28% in August compared to the previous year.
The PHLX Semiconductor Index and the tech-heavy Nasdaq both rose more than 1% on Tuesday, reflecting the overall strength of the technology sector.
While Nvidia and other Western semiconductor companies are thriving, chipmakers in China faced challenges on Tuesday. China’s Semiconductor Manufacturing International Corporation saw its stock fall 18% after the country’s economic planning agency failed to meet market expectations for additional stimulus measures.
As Nvidia continues to innovate and expand its offerings, the company remains at the forefront of the AI revolution. The upcoming third-quarter results from AI-focused companies like Microsoft and Alphabet, as well as Tesla’s robotaxi event, are expected to provide further insights into the potential of AI technologies across various industries.
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