Nvidia Corp’s shares are roaring back after the company successfully calmed investor concerns about product delays and its long-term growth prospects.
The stock is up almost 14 percent this month, including a 2.4 percent gain yesterday that resulted in its first record close since June, though it remains below an intraday peak. It’s the second-best performer in the S&P 500 Index this year.
Recent strength came after CEO Jensen Huang (黃仁勳) said Nvidia’s Blackwell chip “is in full production,” and that demand for it “is insane,” comments that came after Blackwell was delayed due to engineering snags, prompting a selloff that has now been erased.
Photo: Ann Wang, Reuters
In addition, a report last week from Morgan Stanley analysts who met management said that Blackwell orders “are booked out 12 months or so,” with “every indication that business remains robust with very high forward visibility.”
The comments cement the view that Nvidia is still a favored way to invest in artificial intelligence (AI), especially as major companies remain committed to their AI initiatives.
“There had been questions about the impact production delays could have, so these updates are reassuring,” Martin Currie Investment Management Ltd portfolio manager Zehrid Osmani said.
Beyond the Blackwell optimism, recent sales from Taiwan Semiconductor Manufacturing Co (台積電) showed strong AI demand, while a funding round for OpenAI resulted in a US$157 billion valuation.
These events “have driven a reinvigoration of interest in the space, and people are really getting excited about the use cases for reasoning-based AI,” Gabelli Funds portfolio manager John Belton said. “Reasoning represents a new area for Nvidia, and when you consider how compute-intensive it is, this could be a huge new product category.”
Belton views Nvidia as a core holding and sees AI offering “a steady drumbeat of demand” for years. “It’s not an undiscovered stock, but the valuation is still reasonable if it can deliver the numbers that are expected.”
Analysts expect Nvidia’s revenue to more than double in its current fiscal year, and rise another 44 percent the following one, according to data compiled by Bloomberg. The Street has continually raised estimates for Nvidia’s earnings and profit over the past quarter.
Nvidia’s strong growth prospects have kept its valuation in check, helping bulls support their case to keep buying. It trades above 37 times estimated earnings, which represents a premium to the NASDAQ 100 Index, but is below its five-year average and under a June peak of more than 44 times.
“Nvidia still looks formidable,” Osmani said. “It remains really well positioned to harness the AI opportunity.”
Signs of optimism have also been flashing in the options market. On Thursday, there was a wave of purchases in calls that allow holders to buy more than 30 million shares at levels from US$150 to US$189 through March. Nvidia closed at US$138.07 yesterday.
The cost of calls relative to bearish put options — known as the skew — has fallen, making it cheaper to bet on a further rally. The contracts won’t expire until after Nvidia’s fourth-quarter earnings release, expected in late February.
“The stock will remain volatile and orders will be lumpy,” Neuberger Berman Group LLC managing director and senior research analyst Dan Flax said. “But so long as Nvidia executes on its product road map, that will drive the kind of healthy growth that keeps the stock attractive.”
In Italy’s storied gold-making hubs, jewelers are reworking their designs to trim gold content as they race to blunt the effect of record prices and appeal to shoppers watching their budgets. Gold prices hit a record high on Thursday, surging near US$5,600 an ounce, more than double a year ago as geopolitical concerns and jitters over trade pushed investors toward the safe-haven asset. The rally is putting undue pressure on small artisans as they face mounting demands from customers, including international brands, to produce cheaper items, from signature pieces to wedding rings, according to interviews with four independent jewelers in Italy’s main
Japanese Prime Minister Sanae Takaichi has talked up the benefits of a weaker yen in a campaign speech, adopting a tone at odds with her finance ministry, which has refused to rule out any options to counter excessive foreign exchange volatility. Takaichi later softened her stance, saying she did not have a preference for the yen’s direction. “People say the weak yen is bad right now, but for export industries, it’s a major opportunity,” Takaichi said on Saturday at a rally for Liberal Democratic Party candidate Daishiro Yamagiwa in Kanagawa Prefecture ahead of a snap election on Sunday. “Whether it’s selling food or
CONCERNS: Tech companies investing in AI businesses that purchase their products have raised questions among investors that they are artificially propping up demand Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Saturday said that the company would be participating in OpenAI’s latest funding round, describing it as potentially “the largest investment we’ve ever made.” “We will invest a great deal of money,” Huang told reporters while visiting Taipei. “I believe in OpenAI. The work that they do is incredible. They’re one of the most consequential companies of our time.” Huang did not say exactly how much Nvidia might contribute, but described the investment as “huge.” “Let Sam announce how much he’s going to raise — it’s for him to decide,” Huang said, referring to OpenAI
Nvidia Corp’s negotiations to invest as much as US$100 billion in OpenAI have broken down, the Wall Street Journal (WSJ) reported, exposing a potential rift between two of the most powerful companies in the artificial intelligence (AI) industry. The discussions stalled after some inside Nvidia expressed concerns about the transaction, the WSJ reported, citing unidentified people familiar with the deliberations. OpenAI makes the popular chatbot ChatGPT, while Nvidia dominates the market for AI processors that help develop such software. The companies announced the agreement in September last year, saying at the time that they had signed a letter of intent for a strategic
RSS