was fluctuating early on Tuesday but the chip maker looks set to benefit from another surge in investment in artificial intelligence.
shares were down 0.8% at $942.21 in early trading. The stock closed up 0.8% at $950.02 on Monday.
After Nvidia introduced its new Blackwell chips at its developer event last week, the question is how much its big U.S. customers are likely to spend on the next generation of hardware to train AI systems.
Analysts at CFRA estimate that
Alphabet
’s
Google,
and
collectively are set to increase capital expenditures by more than $175 billion this year, representing growth of over 25% from last year. They expect that in 2025—when significant volumes of Blackwell chips are set to hit the market—that growth will slow to a low-teens percentage rate.
“We don’t expect Nvidia’s revenue to let up any time soon, as we expect data center spending to again increase in 2025 after a massive jump in 2024, with the Blackwell Platform…paving the way for higher revenue in the year ahead,” CFRA analyst Angelo Zino wrote in a research note.
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Zino kept a Buy rating on the company’s shares.
Further signs of confidence in demand are coming from Nvidia’s suppliers. South Korean company
intends to invest around $4 billion to build an advanced chip-packaging facility in Indiana according to The Wall Street Journal citing people familiar with the matter. SK Hynix is a supplier of high-bandwidth memory chips which are vital for advanced AI accelerators.
SK Hynix didn’t immediately respond to a request for comment from Barron’s early on Tuesday. A spokeswoman for the company told the Journal that it was reviewing its advanced chip packaging investment in the U.S. but hadn’t made a final decision yet. SK Hynix shares closed up 4.3% in local trading in South Korea on Tuesday.
Among other chip makers,
was down 1.0% and
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was falling 0.4% in early trading. Both stocks had closed down the previous day following a report in the Financial Times that their chips were being targeted for removal from Chinese government devices.
Nvidia shares have risen 92% this year to date through Monday’s close. That compares with a 9.4% rise in the
index and a 9.2% rise in the
over the same period.
Write to Adam Clark at adam.clark@barrons.com
