Shares of Nvidia stock surged on Wednesday, supporting a broader rally in tech stocks, after Chief Executive Officer Jensen Huang said the company is facing stellar demand for its artificial intelligence chips.
Speaking at a Goldman Sachs conference in San Francisco, Huang said tensions had been rising among Nvidia’s customers as they sought to obtain a limited supply of the company’s advanced artificial intelligence chips, Bloomberg reported.
He said the company is experiencing strong demand for its newest generation of AI chips, called Blackwell, and said companies will have no choice but to adopt “accelerated computing” to keep up with demand for AI.
NVIDIA Corporation (NASDAQ:NVDA) rose 8.1% to $116.86 on Wednesday, its biggest daily gain in six weeks. But the stock fell slightly in after-market trading.
Huang said generative AI is still in its early stages, and it’s possible the technology will expand beyond data centers.
His comments come after Nvidia was hit with a sell-off last week after its July-quarter earnings guidance fell short of some raised expectations. Still, the stock is trading up about 150% so far this year.
Nvidia’s losses had also sparked a broader sell-off in the technology sector.
Goldman Sachs reiterated a Conviction Buy rating on Nvidia along with a $135.0 price target in a recent note.
The company has been at the center of a huge, AI-driven valuation boom over the past year and is expected to continue to benefit from a broader push into artificial intelligence.
Nvidia makes the most advanced artificial intelligence chips on the market, but relies on buying from a relatively small group of tech giants for most of its revenue.
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Written by D Fernando
