Nvidia's stock (NVDA) is making waves on Wall Street as it surged 4.7% on Monday, crossing the coveted $151 mark. This spike places the chipmaker on course for what could be a record-setting close, surpassing its previous high of $148.88 per share established on November 7, 2024. With investors eager for insights from CEO Jensen Huang’s keynote address at the Consumer Electronics Show (CES) later on Monday evening, all eyes are on the AI heavyweight as it prepares for another big announcement.
Historically, CES has been the stage where Nvidia makes significant product announcements, and this year is no exception. Huang's presentation, which is set for 6:20 p.m. PST and will be live-streamed across various platforms, is expected to provide investors with not just updates but also hints about the future direction of the company. After recent setbacks with the rollout of its Blackwell AI chips—hindered by design flaws and rumors of server overheating—Nvidia reassured stakeholders during the November earnings call, stating production was ramping up faster than anticipated.
According to analyst Ruben Roy from Stifel, the Blackwell AI chips could present Nvidia with a staggering $100 billion market opportunity, indicating high expectations for their adoption across various industries. Meanwhile, Truist Securities’ William Stein speculated on the potential announcement of Nvidia’s standalone CPU at CES, which could represent another $35 billion opportunity for the company. This perspective aligns with sentiments expressed by Bank of America’s Vivek Arya, who noted the recent stagnation of the stock price over the past six months but anticipates CES will provide the necessary catalyst to reinvigorate investor confidence.
The positive momentum for Nvidia is also reflected broader trends within the semiconductor sector. Following Foxconn's announcement of record-breaking fourth-quarter revenues—totaling 2.1 trillion New Taiwan dollars, approximately $63.9 billion, with notable year-over-year growth driven largely by demand for AI server products—Nvidia experienced immediate gains. This financial boost from Foxconn highlights the interconnectedness of major tech players, as Nvidia's GPUs remain integral to cutting-edge AI applications.
Foxconn’s stellar performance serves as a bullish signal not just for Nvidia but for the entire semiconductor industry. On the same day as Nvidia's stock increase, shares of various semiconductor firms—including AMD and Qualcomm—climbed, prompted by signs of strong market demand amid elevated investments by tech giants like Microsoft. The software behemoth plans to invest around $80 billion on AI data centers in fiscal 2025, cementing its status as Nvidia's largest customer and fueling orchestrated growth for GPUs necessary for advanced AI tasks.
This interdependence among major players signifies the burgeoning market potential for companies entrenched deeply within the AI and semiconductor sectors. With Nvidia shares up approximately 208% over the last year, analysts remain optimistic about the company’s strategic positioning. The upcoming announcements at CES are poised to bolster expectations, particularly with plans to reveal potential advancements focusing on both consumer and AI-driven technologies.
While there’s speculation about possible volatility post-CES, the long-term outlook for Nvidia appears compelling. Investors seem willing to overlook recent stagnation, focusing instead on the underpinnings of strong fundamentals and unprecedented demand for AI hardware as evidence of Nvidia’s future growth prospects. The countdown to Huang’s keynote builds excitement within investor circles, setting the stage for what could be another thrilling year for Nvidia.