shares of Nvidia (NVDA 4.97%) The AI chip leader was able to ride the tide of the times, making it one of today’s big technology winners. meta platform (meta 20.32%) and Amazon (AMZN 7.87%), I jumped both today. Not coincidentally, both companies are advancing their own AI efforts and are major customers of Nvidia.
The positive news appears to have set off a virtuous cycle in the technology sector, with chip makers pushing up shares of Nvidia, a major supplier of AI infrastructure, and the euphoria pushing AI stocks up again.
As of 2:34 p.m. ET, the stock was up 5%.
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The Rising Trend of AI
There was very little company-specific news regarding Nvidia today. american bank raised its price target from $700 to $800 and maintained a buy rating. Analyst Vivek Arya expects semiconductor stocks to beat expectations by 3% to 5% in their next fourth-quarter earnings report, with guidance also beating consensus.
But the main driving force behind Nvidia’s gains today appears to be strong reports and comments from Meta and Amazon about AI. Meta said he plans to roll out the next big language model, Llama 3, this year, and is actively adding new GPUs from Nvidia, saying he plans to purchase 350,000 H100s.
Amazon, on the other hand, touted that it offers “the broadest collection of compute instances powered by Nvidia chips.”
The strength of Nvidia’s position is that at this stage of the AI boom, having your own product is seen as an asset, so customers are essentially promoting Nvidia.
Can Nvidia continue its rise?
Nvidia stock is currently up 34% as the AI boom continues to show signs of gaining momentum. Investors are clearly looking forward to the company’s fourth-quarter earnings report on February 21, as the company’s profits are soaring, so any further improvement could push the stock higher.
Consensus estimates are for revenue to increase 209% to $18.7 billion and earnings per share to range from $0.88 to $4.17. If the company can beat expectations again, expect the stock to soar again.
Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool’s board of directors. John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Bank of America is an advertising partner of The Motley Fool’s Ascent. Jeremy Bowman has held positions at Amazon, Bank of America, and Meta Platforms. The Motley Fool has positions in and recommends Amazon, Bank of America, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.