Nvidia (NVDA) Stock Trades Up, Here Is Why

What Happened?

Shares of leading designer of graphics chips Nvidia (NASDAQ:NVDA) jumped 2.3% in the afternoon session after several Wall Street firms raised their price targets on the stock and reports surfaced of a major deal involving its advanced AI systems. 

The positive sentiment was fueled by a reported deal where cloud provider CoreWeave agreed to supply Meta Platforms with up to $14.2 billion in AI computing power using Nvidia's latest GB300 systems. This agreement highlighted the immense and sustained demand for AI infrastructure from major tech companies. Further boosting investor confidence, several financial firms, including KeyBanc, Barclays, and Citi, increased their price targets for Nvidia. Analysts pointed to an improving supply of key components and strong, continued spending in the AI sector as the primary reasons for their optimistic outlook, which helped push the stock to a record high.

After the initial pop the shares cooled down to $186.21, up 2.4% from previous close.

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What Is The Market Telling Us

Nvidia’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 8 days ago when the stock gained 4.1% on the news that the company announced a partnership with OpenAI that included plans for a potential investment of up to $100 billion. 

The deal aimed to supply OpenAI with advanced AI hardware for its next generation of AI models and the buildout of massive data centers. According to the announcement, the partnership involved deploying at least 10 gigawatts of Nvidia's systems for OpenAI's AI infrastructure. This news solidified Nvidia's central role in the future of artificial intelligence.

Nvidia is up 34.6% since the beginning of the year, and at $186.21 per share, has set a new 52-week high. Investors who bought $1,000 worth of Nvidia’s shares 5 years ago would now be looking at an investment worth $13,762.

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