Key Highlights
- NVDA shares surged over 10% during the week, finishing Friday’s session at $223.96
- SpaceX revealed plans to construct data centers both terrestrially and in space using exclusively Nvidia processors
- Reports suggest Nvidia may reduce HBM memory configurations in its forthcoming Rubin Ultra chip amid supply constraints
- AMD shares fell approximately 8% following its earnings report, despite exceeding Q2 forecasts, but recovered to close the week nearly 2% higher
- Wall Street maintains a consensus “Buy” recommendation on NVDA with a mean price objective of $304.26
Nvidia shares concluded Friday’s trading at $223.96, wrapping up a stellar week that saw the stock appreciate by more than 10%. The Philadelphia Semiconductor Index mirrored this momentum, climbing over 8% throughout the five-day trading period.
This recovery marks a turnaround from recent weakness in semiconductor stocks, which had been pressured by questions surrounding artificial intelligence valuations and whether underlying business fundamentals justified current prices. Market sentiment improved notably this week.
The primary driver emerged from SpaceX. At the company’s inaugural earnings call on Tuesday, Elon Musk revealed that SpaceX intends to develop data center infrastructure both on Earth and in orbital space, utilizing Nvidia’s processors exclusively.
According to Musk’s announcement, SpaceX plans to deploy Nvidia’s Vera Rubin-based NVL72 rackscale system for terrestrial facilities, while launching adapted versions of these rack systems into orbit.
Memory Configuration Concerns for Rubin Ultra
However, the week wasn’t without challenges. A Thursday report from The Information indicated that Nvidia may be contemplating reductions in high-bandwidth memory allocation for its next-generation Rubin Ultra chip.
Originally anticipated to feature 1TB of HBM, the report suggests Nvidia is currently evaluating configurations with 192GB and 256GB, a decrease from the 288GB incorporated in the existing flagship Rubin chip. The primary factor driving this potential change is a worldwide memory supply shortage.
Nevertheless, the stock maintained its upward trajectory despite this news, finishing the week strong.
From an institutional investment perspective, Steelhead Wealth Management acquired 3,856 NVDA shares during the first quarter, representing approximately $672,000 in value. Institutional stakeholders currently control 65.27% of the company’s outstanding shares.
Nvidia’s most recent quarterly results, published on May 20, demonstrated earnings per share of $1.87, surpassing the $1.76 analyst consensus. Revenue reached $81.61 billion, exceeding expectations of $78.42 billion and representing an 85.2% year-over-year increase.
The company simultaneously authorized an $80 billion stock repurchase program and increased its quarterly dividend to $0.25 per share, a substantial rise from the previous $0.01.
AMD Experiences Mixed Week
AMD faced a more volatile week in comparison. Despite surpassing Q2 expectations and providing optimistic Q3 guidance, investors expressed disappointment, triggering an approximately 8% decline on the earnings announcement day.
AMD managed to rebound somewhat, closing the week with a modest gain just below 2%.
Looking at the trailing twelve-month period, AMD has actually outperformed with a 180% gain, compared to Nvidia’s 28% advance. AMD’s central processing unit division and its forthcoming Helios rackscale platform, designed to rival Nvidia’s NVL72, have fueled this impressive performance.
AMD also strengthened its AI inference capabilities by acquiring startup Taalas. Industry analysts observed that this acquisition doesn’t immediately narrow the competitive gap with Nvidia.
Regarding analyst coverage, Wedbush Securities increased its NVDA price target from $300 to $330 while maintaining an outperform rating. Wells Fargo preserved its overweight rating with a $315 price objective. The consensus target among analysts stands at $304.26, supported by 48 buy recommendations, 3 strong buys, and 2 hold ratings.
Insider trading activity tilted heavily toward sales, with 45 insider sell transactions and zero purchases documented over the past six months. Director Mark A. Stevens divested 885,000 shares at an average price of $210.17 during June.
NVDA’s 52-week trading range extends from a low of $164.07 to a peak of $236.54.
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