On Wednesday, Nvidia Corporation NVDA, part of the Zacks Semiconductor – General industry, climbed 2.3% in the session. The rally came amid reports that Elon Musk’s artificial intelligence (AI) venture, xAI, is planning to significantly ramp up its hardware capabilities by purchasing billions of dollars worth of AI chips from Nvidia.
The report suggested that xAI is preparing for one of the largest private-sector chip procurements to date. The company is seeking to buy as much as $12 billion worth of Nvidia’s GPUs, including the sought-after H100 and H200 chips, both of which are essential for training and deploying large language models and advanced generative AI tools.
Investor enthusiasm over the news reflects Nvidia’s pivotal position in the rapidly expanding AI ecosystem. The company has become the go-to provider of the silicon infrastructure needed for cutting-edge machine learning, powering everything from autonomous driving systems to enterprise AI platforms. As demand for generative AI applications surges, Nvidia’s chips have grown more critical to the broader tech market. The investor mood also underscored the continued confidence they have in Nvidia’s future, even after a year of spectacular growth.
Elon Musk’s xAI has positioned itself as a challenger to OpenAI, the Microsoft-backed firm behind ChatGPT. Musk, a co-founder of OpenAI who has since left the organization, has been outspoken about the need for more transparent and open-ended approaches to AI.
The potential xAI deal is a reminder that Nvidia’s dominance in the AI space is unlikely to fade anytime soon. As companies across sectors race to develop AI capabilities, Nvidia remains at the heart of the technological gold rush, and any sign of expanded demand, especially from high-profile players like Elon Musk, sends an unmistakable signal to the market.
Nvidia currently carries a Zacks Rank #3 (Hold). Year to date, Nvidia has grown 27.1% compared with a 25.8% advance for its Zacks Peer Group. Amtech Systems, Inc. ASYS and Texas Instruments Incorporated TXN are noteworthy competitors in the same space. Both Amtech and Texas Instruments also carry a Rank #3 and have declined 10.2% and 0.6%, respectively, in the same period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bottom Line
To summarize, this development not only highlights surging demand for generative AI infrastructure but also reinforces Nvidia’s central role in powering the next wave of AI innovation. Investor confidence remains strong as the company continues to lead the AI hardware race.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Texas Instruments Incorporated (TXN): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Amtech Systems, Inc. (ASYS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
