What Happened?
Shares of leading designer of graphics chips Nvidia (NASDAQ: NVDA) jumped 5.2% in the afternoon session after CEO Jensen Huang laid out an overwhelmingly bullish case for the company's future at a landmark GTC keynote in Washington, D.C.
The biggest news electrifying the market was Huang's declaration that NVIDIA had visibility on $500 billion of business over the next five to six quarters, citing unstoppable global demand for 'AI factories'. The company also announced major new partnerships, including a strategic alliance with Eli Lilly to build generative AI models and digital twins to revolutionize and accelerate the drug discovery process. Huang also detailed the company's expansion into new multi-billion dollar markets, including the $1 billion investment in Nokia to build AI-driven 6G networks and a major push into 'sovereign AI' where entire nations are buying NVIDIA's hardware. This combination of unprecedented forward-looking revenue guidance and strategic expansion into massive sectors like pharmaceuticals and global telecoms solidified the narrative that NVIDIA's AI dominance is still in its early stages.
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What Is The Market Telling Us
Nvidia’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 15 days ago when the stock gained 2.6% on the news that President Donald Trump softened his stance on China tariffs, which boosted technology stocks, and the company made several announcements regarding new partnerships and product adoption for its AI data centers.
The easing of trade tensions was particularly beneficial for chipmakers like Nvidia, as China represented a critical market for its data center products. Adding to the positive news, the company announced a collaboration with ABB to develop next-generation AI data centers and revealed that both Meta and Oracle would use its Spectrum-X Ethernet switches to speed up their AI networks. Further partnerships were also confirmed with Intel and Samsung Foundry. Reinforcing the optimistic outlook, a Mizuho analyst raised the price target on the stock to $225 from $205, citing Nvidia's dominance in the AI data center market.
Nvidia is up 45.7% since the beginning of the year, and at $201.53 per share, has set a new 52-week high. Investors who bought $1,000 worth of Nvidia’s shares 5 years ago would now be looking at an investment worth $15,960.
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