Nvidia’s stock demonstrated a notable increase on Tuesday, reflecting the broader positive momentum among chip stocks, driven by significant investments in infrastructure to support artificial intelligence (AI) technology. In premarket trading, Nvidia’s shares rose by 0.9%, reaching $129.40, following a 1.9% increase on Monday. This upward trend comes after the stock briefly fell into correction territory late last month. Nvidia now seems to be on the rise again, approaching its adjusted record closing high of $135.58, post its recent 10-for-1 stock split.
Other semiconductor stocks also experienced gains, reflecting the robust market conditions. Taiwan Semiconductor Manufacturing Company (TSMC) reached a record high on Monday, underscoring the sector’s strength. Similarly, Advanced Micro Devices (AMD) saw a 0.6% rise in premarket trading, while Intel’s shares increased by a substantial 3.9%. Super Micro Computer, known for its server manufacturing, gained 0.7%.
The optimism surrounding AI infrastructure investments further fueled these gains. This week, privately held data center operator CyrusOne announced on Monday that it had secured a significant $7.9 billion line of credit. This funding is earmarked for both existing and future development projects within the U.S., highlighting the immense financial backing behind AI-related growth. While CyrusOne does not directly purchase Nvidia’s products, its expansion underscores the broader market anticipation that AI technology will continue to flourish, driving up demand for both chips and data center facilities. Supporting this trend, commercial real estate company CBRE reported a 24% growth in data center inventory across North America during the first quarter of 2024, compared to the same period in the previous year.
Nvidia’s impressive performance this year is evident in its stock price, which has surged by 159% through to Monday’s close. This remarkable rise significantly outpaces the 17% increase observed in the S&P 500 index and the 23% jump in the Nasdaq Composite over the same period. The substantial growth in Nvidia’s stock price highlights the market’s confidence in the company’s pivotal role in advancing AI technology and the ongoing investments in the necessary infrastructure to support this burgeoning field.
As the demand for AI capabilities continues to expand, driven by advances in machine learning, data analytics, and autonomous systems, companies like Nvidia are positioned at the forefront of this technological evolution. Their products, essential for high-performance computing and AI applications, are increasingly integral to the operations of data centers and other tech infrastructures, reflecting the long-term growth potential within the sector.