Nvidia (NVDA) is on the verge of reaching a record-breaking stock price as investor confidence in the company’s dominance in artificial intelligence continues to soar. Shares climbed more than 3% in early Monday trading, pushing Nvidia’s stock to over $138, surpassing its previous record closing price of $135.58 from June. With October seeing a string of six consecutive days of gains, Nvidia’s ascent is fueled by the growing demand for AI chips and recent developments across the semiconductor industry.
AI Surge Drives Nvidia’s Market Performance
Nvidia’s October rally began following a major $6.6 billion funding round for OpenAI, the company behind ChatGPT. Much of this funding is expected to flow back to Nvidia as OpenAI increases its demand for the chipmaker’s AI hardware. This news sparked investor optimism, and Nvidia’s stock has been on an upward trajectory since, buoyed by the tech world’s need for more powerful AI infrastructure.
Wall Street analysts have reaffirmed their confidence in Nvidia’s future. Last week, KeyBanc predicted that Nvidia could generate $7 billion in revenue in the fourth quarter from its new Blackwell chips alone, while older GPU models remain in high demand. Analysts at Wedbush also noted that additional AI startup funding could contribute significantly to Nvidia’s revenues. These positive reports have helped drive the company’s stock towards record highs.
Expanding Partnerships and Global Growth
Nvidia’s recent momentum extends beyond the U.S. markets. During its AI Summit in Washington, D.C., the company highlighted the growing importance of its software in the AI sector. Nvidia also made headlines with Foxconn’s announcement that the two companies plan to build Taiwan’s largest supercomputer, as well as a megafactory in Mexico dedicated to assembling Nvidia servers powered by its Grace Blackwell chips. These moves not only expand Nvidia’s global footprint but also reduce its reliance on China amid escalating trade tensions between the U.S. and China.
Foxconn chair Young Liu shared the enthusiasm, telling Bloomberg Television that demand for Nvidia’s AI chips has been “crazy,” as manufacturers scramble to meet the surging market needs. Nvidia CEO Jensen Huang echoed this sentiment, noting in a recent CNBC interview that demand for the Blackwell chips has been “insane.”
Competing for the Top Spot
Nvidia’s market cap, which stood at $3.4 trillion on Monday morning, has put the company within striking distance of overtaking Apple ($3.5 trillion) as the world’s most valuable company. Over the past year, Apple, Microsoft, and Nvidia have traded places as the top three most valuable companies on Wall Street. If Nvidia’s stock continues to rise, the chipmaker could soon claim the top spot.
This achievement comes after Nvidia’s shares faced a series of challenges earlier in the year. In August, the company’s stock dropped following second-quarter earnings that fell slightly below investor expectations. Nvidia also battled concerns over rising U.S.-China trade tensions and a subpoena from the U.S. Department of Justice in early September, which the company denied. However, the stock has since rebounded, helped in part by a 10-for-1 stock split in June.
AI Demand and Semiconductor Sector Growth
The semiconductor sector as a whole is benefitting from the surge in demand for AI technology. Taiwan Semiconductor Manufacturing Company (TSMC), one of Nvidia’s chip manufacturers, reported better-than-expected sales last week, indicating that AI demand remains strong. In addition, industry-wide semiconductor sales rose 28% in August from the previous year, according to data reviewed by JPMorgan, underscoring the continued appetite for AI-related hardware.
“AI is hot,” said Patrick Moorhead, CEO of Moor Insights and Strategy, adding that he expects the AI data center trade to experience continued growth over the next year. Wall Street analysts are also optimistic, with nearly 90% of analysts covering Nvidia recommending a Buy rating on the stock.
Looking Ahead: Nvidia’s Future Prospects
Nvidia’s next major financial milestone comes on November 19, when the company is scheduled to report its latest earnings. Wall Street is expecting impressive results, with analysts forecasting revenues of $33 billion—an 82% increase from the same period last year. The company’s AI dominance and its ability to secure new partnerships have placed it in a prime position for long-term success.
As Nvidia continues to break records and push the boundaries of AI technology, the company’s future looks bright. With Big Tech’s massive spending on AI hardware showing no signs of slowing, Nvidia is well-positioned to maintain its status as one of Wall Street’s most valuable players.
