Shares of Nvidia have seen a significant increase of up to twenty-five percent in the past month, approaching new record levels ahead of the upcoming earnings season for technology companies in the coming weeks. Major companies such as Meta, Microsoft, and Alphabet are expected to update investors on their future investments in artificial intelligence.
After a slight decline in late August and early September, Nvidia stocks have rebounded significantly. The stock closed with a slight drop on Wednesday at $132.65, close to its highest closing level reached in June at $135.58.
Nvidia has surpassed Microsoft to become the second most valuable company in the market, behind only Apple, according to CNBC.
Nvidia is benefiting greatly from the artificial intelligence boom, as companies like Meta, OpenAI, Alphabet, Microsoft, and Oracle continue to unveil new technologies that require significant investments in the graphics processing units produced by the company.
In August, Nvidia announced its financial results for the second quarter, showing a revenue increase of one hundred and twenty-two percent year-over-year, with net income more than doubling to $16.6 billion. The company also provided estimates that exceeded expectations for the current quarter, announcing that it expects to ship the new Blackwell AI chip worth several billion dollars. High demand for its products indicates that the company expects shipments to increase for the current generation Hopper chip in the next two quarters.
In a note on Wednesday, Mizuho analysts confirmed that Nvidia remains a leader in artificial intelligence training and inference chips for data centers, estimating that the company holds about ninety-five percent of the market.
While analysts set a price target of $140 per share, they also pointed out risks related to increased export restrictions to China or geopolitical tensions related to Taiwan, as well as the possibility of a significant decrease in spending on artificial intelligence servers.
Speaking about the “insane” demand for the Blackwell chip, company CEO Jensen Huang said in an interview with CNBC last week, “Everyone wants the most and everyone wants to be first.”
Production of graphics processing units, priced between thirty and forty thousand dollars per unit, is expected to increase in the fourth quarter of the current year and continue into the next fiscal year.
Nvidia stocks also saw another increase in the past month, jumping by four percent on September 23 after reports that Huang had sold his shares in the company.
