Nvidia (NVDA) stock rose more than 3% in afternoon trading Tuesday, marking its fifth straight day of gains.
Wall Street analysts at KeyBank, Citi (C), Bernstein and several other investment firms reiterated their buy ratings on the stock this week.
KeyBanc analysts raise Nvidia’s fiscal 2025 revenue outlook from $128.5 billion to $130.6 billion, citing Nvidia’s new flagship Blackwell AI chip as contributing $7 billion to fourth-quarter revenue. . That beats Wall Street’s consensus estimate for sales of $125.6 billion in 2025, according to Bloomberg data. Despite ramping up production of Nvidia’s Blackwell chips, KeyBanc said in a note to investors on Monday that demand for Nvidia’s previous AI chip models (H100 and H200) “remains very strong. ” he said.
Nvidia stock is up 13% over the past week and 189% since last year.
Wedbush analysts said “another positive data point” for Nvidia could mean a new wave of funding for AI startups. The Information reported on Monday that OpenAI’s staggering $6.6 billion funding round is likely to spark a new wave of AI investment. New funding for AI startups could, in turn, stimulate demand for Nvidia’s AI chips.
Wedbush’s Matt Bryson said Tuesday that the report suggests that “AI spending growth is unlikely to benefit NVDA through most, if not all, of 2025.” said.
Nvidia is looking to prove its value beyond AI hardware. At this week’s AI Summit in Washington, D.C., the company is trying to highlight the strengths of its AI software products to prove it’s more than just a chipmaker.
Deepu Talla, VP of Robotics and Edge Computing at NVIDIA, and Zhe Shi, Chief Digital Officer at Foxconn, speak at Honghai Tech Day in Taipei on October 8, 2024. (AP Photo/Chiang Ying-ying) (Related coverage)
Adding to the wave of positive press for Nvidia was the announcement of Foxconn’s new giant factory that will assemble Nvidia’s AI servers. Young Liu, chairman of electronics maker Foxconn (2354.TW), announced on Tuesday at an annual event in Taipei that he would build the world’s largest factory to assemble Nvidia GB200 servers in Mexico, according to the Financial Times. He said it was under construction. Liu said there is “extraordinary” demand for Nvidia’s latest AI chips. The move will reduce Nvidia’s dependence on China at a time of heightened trade tensions.
Nvidia and Foxconn said they are also working to build Taiwan’s fastest supercomputer.
Nvidia isn’t the only semiconductor company growing. JPMorgan (JPM) said Tuesday that sales across its division rose 28% year over year in August, citing semiconductor industry data from WSTS.
“We continue to have a positive view on semiconductor and semiconductor equipment stocks, as we believe stock prices will continue to rise in anticipation of improved supply and demand in the second half of 2024/25.” [the second half of 2024 and 2025] Stability/increasing trend in profitability in CY24/25 [the 2024 and 2025 calendar years]”
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The PHLX Semiconductor Index (^SOX) and the tech-heavy Nasdaq Index (^IXIC) both rose more than 1% on Tuesday.
Meanwhile, Chinese chip makers faced a different fate on Tuesday. China Semiconductor Manufacturing International Corporation (0981.HK) fell 18% after China’s Economic Planning Administration failed to meet market expectations for more economic stimulus. Investors had hoped that economic stimulus would boost China’s semiconductor sector.
Laura Bratton is a reporter for Yahoo Finance.
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