Shares of Nvidia (NVDA) rose 4% on Tuesday, posting their fifth straight day of gains.
Wall Street analysts at KeyBanc, Citi (C), Bernstein and several other investment firms reiterated their buy ratings on the stock this week.
KeyBanc analysts raised their fiscal 2025 sales outlook for Nvidia from $128.5 billion to $130.6 billion, with Nvidia’s new flagship Blackwell AI chips contributing $7 billion to fourth-quarter revenue. That’s higher than Wall Street’s consensus estimate of $125.6 billion for 2025 revenue, according to Bloomberg data.
Even as production of Nvidia’s Blackwell chips ramps up, KeyBanc said in a note to investors on Monday that demand for Nvidia’s previous AI chip models – H100s and H200s – “remains extremely robust.”
Nvidia shares are up nearly 14% in the past week and up 190% year-over-year.
Wedbush analysts said “another positive data point” for Nvidia is a potential new wave of funding for AI startups. The Information reported Monday that OpenAI’s staggering $6.6 billion funding round will likely spark a wave of new AI investments. New funding for AI-related startups would in turn boost demand for Nvidia’s AI chips.
Wedbush’s Matt Bryson said Tuesday that the report is an indication “that there is little chance that AI spending growth will pause in NVDA’s favor for much (if not all of 2025).
Nvidia also wants to prove its worth beyond AI hardware. At the AI Summit in DC this week, the company is looking to highlight the strength of its AI software offering in an effort to show that it is more than just a chipmaker.
Adding to the wave of positive press for Nvidia was the announcement of Foxconn’s (2354.TW) new mega-factory that assembles Nvidia’s AI servers. Chairman of Taiwan-based electronics manufacturer Young Liu said Tuesday at an annual event in Taipei that Foxconn is building the world’s largest factory for assembling Nvidia GB200 servers in Mexico, according to the Financial Times. Liu said there is “crazy” demand for Nvidia’s latest AI chips. The move will reduce Nvidia’s dependence on China amid rising trade tensions.
Nvidia and Foxconn said they are also working to build Taiwan’s fastest supercomputer.
Nvidia isn’t the only semiconductor company thriving. Citing WSTS semiconductor industry data, JPMorgan (JPM) said Tuesday that industry-wide sales rose 28% in August from last year.
“We remain positive on semiconductor and semiconductor equipment stocks as we believe stocks should continue to rise in anticipation of better supply/demand in the second half of 24/25. [the second half of 2024 and 2025] and stable/increasing earnings trends in CY24/25 [the 2024 and 2025 calendar years].”
The PHLX Semiconductor Index (^SOX) and the tech-heavy Nasdaq (^IXIC) both rose more than 1% on Tuesday.
Meanwhile, chipmakers in China faced a different fate on Tuesday. After China’s economic planning agency failed to deliver on market hopes for more stimulus, China’s Semiconductor Manufacturing International Corporation (0981.HK) fell 18%. Investors had expected stimulus initiatives to boost China’s semiconductor sector.
Laura Bratton is a reporter for Yahoo Finance.
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