Nvidia Corp.'s shares have rebounded dramatically after months of decline, driven by easing trade tensions with China and persistent demand for artificial intelligence infrastructure. Following long-term sales agreements during President Trump's Middle East trip and a favorable earnings season, Nvidia's stock is on track for its strongest month in a year. Currently, the stock has surged 43% from its April low, marking a shift from concerns about AI development costs impacting sales. Analysts suggest the capital expenditure from major tech firms remains robust, further solidifying Nvidia's leading position in the market.
Everyone wants off the train before the party stops, but I don't know why they expect it to stop. With respect to spending on AI, I think we're in the second inning of a nine-inning game.
The stock rallied this week and is on track for the best month in a year after a series of long-term sales agreements during President Donald Trump's trip to the Middle East.
Nvidia's latest rally marks a stark turnaround from the biggest drawdown in the stock since 2022. At its low last month, the chipmaker's shares had fallen 37% from a January all-time high.
This season showed that the hyperscalers continue to increase their estimates for what they're going to spend, and Nvidia remains the primary beneficiary of that capex.
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