Nvidia‘s (NVDA) stock received a significant boost on Thursday, surging more than 5% to $122 & change a share, following CEO Jensen Huang’s enthusiastic remarks about the demand for the company’s next-generation Blackwell chips.
In a CNBC interview on Wednesday, Huang described the demand as “insane,” reassuring investors and market watchers alike about the chip’s production status and potential impact on Nvidia’s future growth.
The CEO’s confirmation that Blackwell chips are in “full production” comes as a relief to many, especially considering recent design issues that had caused some delays in customer rollouts. Huang’s statement, “[e]verybody wants to have the most and everybody wants to be first,” underscores the intense competition and high stakes in the cutting-edge chip market, particularly in the realm of artificial intelligence processing.
Nvidia’s stock performance has been a rollercoaster ride in recent months. Despite experiencing a slump fueled by the unwinding of the yen carry trade in mid-July and subsequent rotation out of Big Tech stocks, the company’s shares have demonstrated remarkable resilience.
Year-to-date, Nvidia has posted gains of around 154%, with an impressive 180% increase over the past 12 months and a staggering 2,585% growth over five years.
The anticipation surrounding the Blackwell chip rollout has been palpable, with many investors viewing it as the next major catalyst for Nvidia’s growth. This excitement is reflected in Wall Street’s overwhelmingly positive outlook on the stock, with 90% of analysts recommending it as a “buy.” The majority of these analysts project that Nvidia’s shares will climb to the mid-$147 level over the next year, according to Bloomberg consensus estimates.
However, it’s worth noting that Nvidia’s journey hasn’t been without challenges. Macroeconomic factors, including concerns over trade relations with China, have put pressure on the stock price. Yet, the broader narrative around the artificial intelligence trade remains strong, with investors and analysts maintaining confidence in its long-term potential.
The surge in Nvidia’s stock following Huang’s comments highlights the critical role that next-generation chip technology plays in the company’s valuation and future prospects. With the AI industry continuing to evolve at a rapid pace, Nvidia’s position at the forefront of chip innovation positions it well to capitalize on the growing demand for advanced computing power.
The coming months will obviously be crucial as the market watches closely to see how the Blackwell chip rollout unfolds and whether it can live up to the high expectations set by both the company and its eager customers.
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