Nvidia’s stock surged over 3% on Tuesday, marking its fifth consecutive day of growth, driven by a chorus of bullish sentiments from top Wall Street analysts. The optimism was fueled by KeyBanc’s revised sales forecast for fiscal year 2025, which now stands at $130.6 billion, surpassing the consensus estimate of $125.6 billion. The upgraded outlook is largely attributed to the anticipated success of Nvidia’s cutting-edge Blackwell AI chips, expected to contribute a substantial $7 billion to fourth-quarter revenues.
Despite the ramp-up in Blackwell chip production, demand for Nvidia’s preceding AI models, H100s and H200s, remains remarkably strong, according to KeyBanc. This robust demand has propelled Nvidia’s shares to a 13% gain over the past week and a staggering 189% increase from last year.
Wedbush analysts pointed to a potential new wave of funding for AI startups as another positive catalyst for Nvidia. The recent $6.6 billion funding round for OpenAI is expected to trigger a surge in AI-related investments, driving up demand for Nvidia’s AI chips. This trend is likely to sustain through 2025, benefiting Nvidia significantly.
Beyond its AI hardware prowess, Nvidia is seeking to demonstrate its capabilities in AI software. At its AI Summit in Washington D.C., the company is highlighting the strength of its AI software offerings to prove its value extends beyond chipmaking.
In another significant development, Foxconn, a leading electronics manufacturer, announced plans to build the world’s largest factory assembling Nvidia’s AI servers in Mexico. This move will reduce Nvidia’s reliance on China amid rising trade tensions and capitalize on the “crazy” demand for its latest AI chips.
The semiconductor sector as a whole is experiencing a resurgence, with industry-wide sales rising 28% in August from last year, according to JPMorgan. This uptrend is expected to continue, driven by improving supply and demand dynamics and stable earnings growth in the coming years. As a result, the PHLX Semiconductor Index and the tech-heavy Nasdaq both rose over 1% on Tuesday.
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