On June 2, 2024, Jensen Huang, the co-founder and CEO of Nvidia, delivered a speech at an event in Taipei, Taiwan. Following this event, Nvidia's stock prices reached an unprecedented peak as investors showed renewed interest in the artificial intelligence market, which had experienced a temporary slowdown since the summer. At one point, the stock price surged by more than 3%, briefly reaching a new intraday peak of $140.89, surpassing the previous record of $140.76 set on June 20. By the end of the trading day, the shares closed with a modest increase of about 1% at $136.93.

Nvidia's stock market milestone arrived on the heels of Taiwan Semiconductor Manufacturing Company's (TSMC) announcement of surpassing third-quarter earnings estimates and reporting a 54% profit increase. As the world's largest chip producer, TSMC manufactures chips for major companies including Apple, Nvidia, AMD, and ARM.

Nvidia's stock performance has been remarkable, with a closing high of $138.07 on Monday, which eclipsed the previous record of $135.58 set on June 18. Year-to-date, the shares have seen an impressive increase of 180%, and since the start of 2023, they have grown more than ninefold.

Tech giants such as Microsoft, Meta, Google, and Amazon are procuring Nvidia GPUs in substantial quantities to construct extensive computer clusters for their sophisticated AI endeavors. These companies are all scheduled to release their quarterly financial results by the end of October.

Recently, Nvidia has reported an overwhelming demand for its next-generation AI GPU, dubbed Blackwell. The company anticipates generating billions of dollars in revenue from this innovative product in the fourth quarter.

The Resurgence of AI Trade

The renewed vigor in the AI trade has been a significant factor in Nvidia's stock performance. After a period of stagnation, the market has once again recognized the potential of artificial intelligence and the role of companies like Nvidia in driving this technology forward. The surge in stock prices reflects the market's confidence in Nvidia's ability to capitalize on the growing demand for AI capabilities.

TSMC's Impact on Nvidia's Success

The success of TSMC, as the leading chip manufacturer, has had a direct impact on Nvidia's performance. TSMC's ability to exceed earnings estimates and increase profits is a testament to the robust demand for advanced chips, which are essential for AI applications. Nvidia, as a key client of TSMC, benefits from the manufacturer's ability to produce high-quality chips that meet the rigorous requirements of AI technology.

Nvidia's Stock Performance

Nvidia's stock has been on an upward trajectory, setting new records and outperforming market expectations. The closing high of $138.07 on Monday is a significant achievement, indicating that investors are bullish on Nvidia's future prospects. The year-to-date increase of 180% and the ninefold growth since the beginning of 2023 demonstrate the company's resilience and growth potential in the face of market fluctuations.

The Role of Tech Giants in Nvidia's Growth

The tech industry's heavy hitters are playing a crucial role in Nvidia's growth. Companies like Microsoft, Meta, Google, and Amazon are investing heavily in AI by purchasing Nvidia GPUs in large quantities. These purchases are essential for building the computer clusters necessary for advanced AI research and development. As these companies prepare to release their quarterly results, their continued investment in AI is expected to further bolster Nvidia's stock performance.

Nvidia's Next-Generation AI GPU: Blackwell

Nvidia's announcement of the Blackwell AI GPU has generated significant excitement in the market. The company has reported "insane" demand for this next-generation product, which is designed to handle the complex computations required for advanced AI applications. Nvidia's expectation of billions of dollars in revenue from Blackwell in the fourth quarter highlights the potential of this product to drive the company's growth and solidify its position as a leader in the AI space.

Conclusion

Nvidia's recent stock performance is a testament to the company's ability to innovate and capitalize on the growing demand for AI technology. With the support of major tech companies and the success of its manufacturing partner TSMC, Nvidia is well-positioned to continue its upward trajectory. The market's enthusiasm for the Blackwell AI GPU and the anticipated revenue it will generate further underscores Nvidia's potential for future growth and success in the AI industry.