Nvidia (NASDAQ: NVDA) was able to ride the coattails of two other tech companies that had strong days: Meta Platforms (NASDAQ: META) and Amazon (NASDAQ: AMZN). Both corporations are heavily reliant on Nvidia for their AI needs, which is no accident.
Nvidia is a leading provider of AI infrastructure, and the positive reports appeared to trigger a positive feedback loop in the tech industry, driving up the share price of the chipmaker. The optimism around AI is currently driving the price of AI stocks even higher.
Nvidia didn't release much news about the firm today. With no change to their buy recommendation, Bank of America increased their price objective for the stock from $700 to $800. In the next fourth-quarter earnings release, analyst Vivek Arya predicted that the chip stock will outperform predictions by 3% to 5% and that guidance would be higher than consensus.
Nevertheless, the robust reports from Meta and Amazon, together with their remarks regarding AI, appeared to be the primary factor propelling Nvidia's advances today. In addition to rapidly acquiring additional GPUs from Nvidia—saying it intends to purchase 350,000 of its H100s—Meta said it hoped to release its next big language model, Llama 3, this year.
Elsewhere, Amazon said that it provides the "most expansive collection of compute instances with Nvidia chips."
Because owning its product is seen as an asset at this point of the AI boom, Nvidia's customers effectively conduct the promotion for the company.
As evidence mounts that the AI boom is only going to gain momentum, Nvidia stock has jumped 34%. With profits skyrocketing, investors can't wait for the company's Q4 results release on February 21 to see if the stock continues to rise.
Earnings per share are expected to reach $4.17, up from $0.88, while sales is projected to surge 209% to $18.7 billion. The stock might jump again if the firm manages to outperform expectations.
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