Nvidia stock goes on a $290 billion tear as customers spend on AI

(Bloomberg) — Shares of Nvidia Corp. are recovering from last week's sell-off, as some of the chip giant's biggest customers double down on their investments in artificial intelligence.

Most read from Bloomberg

Shares of the Santa Clara, California-based company rose 15% this week, adding nearly $290 billion in market capitalization and posting its best weekly performance since last May. The increase comes after companies like Meta Platforms Inc., Alphabet Inc. and Microsoft Corp. have committed billions in AI investments.

“The future is AI,” said Paul Marino, Chief Revenue Officer at GraniteShares. “And if the biggest companies in the world each put tens of billions of dollars into this, I think Nvidia should be the big winner.”

The move marks a sharp reversal from last Friday's 10% decline, the stock's worst day in more than four years, which came amid concerns that enthusiasm for chipmakers had run too far, too fast after Taiwan Semiconductor Manufacturing Co. had scaled back its expansion prospects. .

Nvidia currently dominates the lucrative market for accelerators that power data centers that perform complex computing tasks required for AI development. But the entire semiconductor industry is on the rise, with the Philadelphia Stock Exchange Semiconductor Index, also known as the SOX, up 10% this week, compared with a 2.7% gain in the broader S&P 500 Index and a jump of 4% in the technology-heavy sector. Nasdaq 100 Index.

First-quarter reports “from the top U.S. hyperscalers – Google, Microsoft and Meta – suggest meaningful upside for CY24 investment, driven primarily by AI infrastructure buildout,” Bank of America Corp. analysts wrote. led by Vivek Arya in a note to clients on April 25.

Meta shares slumped on Thursday, plunging 11%, after the Facebook parent company released a disappointing quarterly revenue forecast and revealed it will spend billions of dollars more than expected on AI this year. But Microsoft and Google parent company Alphabet convinced investors that spending on AI was already paying off.

Meanwhile, Amazon.com Inc., another major Nvidia customer, will report first-quarter results on Tuesday.

“I hate to say things are a no-brainer,” Marino said. “But when you look at all the budget lines and all the capital expenditure, where is that going? It should go to Nvidia, they have the best chips.”

—With help from Jeran Wittenstein.

(Updates with closing prices everywhere.)

Most read from Bloomberg Businessweek

©2024 BloombergLP

Related Posts

  • Finance
  • May 15, 2024
  • 12 views
  • 3 minutes Read
Here are the top ten picks for the Mormon church's $55 billion stock portfolio

Getty Images The investment arm of the Mormon church disclosed some of its assets in a 13F filing on Wednesday. The church has built a portfolio of individual stocks worth…

  • Finance
  • May 15, 2024
  • 14 views
  • 4 minutes Read
Florida lawmakers are proposing to change the tax code to provide premium relief for homeowners

Florida lawmakers are proposing to change the tax code to provide premium relief for homeowners Florida Congressman Byron Donalds is working with his colleague Senator Rick Scott on a bill…

Leave a Reply

Your email address will not be published. Required fields are marked *

You Missed

Ohio's Republican governor is helping Biden gain access to ballots

  • May 25, 2024
Ohio's Republican governor is helping Biden gain access to ballots

South Africa's four major political parties are entering the final weekend of their pre-election campaign

  • May 25, 2024
South Africa's four major political parties are entering the final weekend of their pre-election campaign

Michigan travel guide: Discover the state's top tourist stops

  • May 25, 2024
Michigan travel guide: Discover the state's top tourist stops

The “absolute worst” times for car buying are over

  • May 25, 2024
The “absolute worst” times for car buying are over

With Not My Job guest J. Kenji López-Alt: NPR

  • May 25, 2024
With Not My Job guest J. Kenji López-Alt: NPR

Oops!… I Did it Again – Singer Brittney Spears posts nude video on the beach: “Hello to My Ass!!!” | The Gateway expert

  • May 25, 2024
Oops!… I Did it Again – Singer Brittney Spears posts nude video on the beach: “Hello to My Ass!!!”  |  The Gateway expert

Donald Trump is targeting Senator Tom Cotton as his 2024 running mate

  • May 25, 2024
Donald Trump is targeting Senator Tom Cotton as his 2024 running mate

Trump could be hammered for the conviction for violating the secrecy code

  • May 25, 2024
Trump could be hammered for the conviction for violating the secrecy code

Record broken for most passengers screened at US airports, TSA says

  • May 25, 2024
Record broken for most passengers screened at US airports, TSA says

Andy Cohen asks judge to dismiss lawsuit against Leah McSweeney

  • May 25, 2024
Andy Cohen asks judge to dismiss lawsuit against Leah McSweeney

Jack Smith asks judge to limit Trump's statements after 'inflammatory' statements about FBI raid

  • May 25, 2024
Jack Smith asks judge to limit Trump's statements after 'inflammatory' statements about FBI raid