The rise comes after a 22% climb during its latest rally, fueled by an update to its artificial intelligence (AI) processors. As the world’s most valuable chipmaker, Nvidia’s stock has surged over 240% this year, earning the title of the best-performing component on the Nasdaq 100 and S&P 500 indexes. During the recent rally, the company’s AI dominance has led rivals to seek alternatives to challenge its position, adding approximately $219 billion in market value.
The latest boost in shares is attributed to the announcement of Nvidia’s updated graphics processing unit (GPU), the H200, equipped with the capability to use high-bandwidth memory or HBM3e. This enhancement is designed to enhance the GPU’s performance in handling the substantial data sets required to develop and implement AI systems.
Wolfe Research analyst Chris Caso sees this update as evidence of Nvidia accelerating its product cadence in response to the growing AI market and increasing performance requirements, expanding its competitive advantage. The existing version of Nvidia’s AI accelerator is already in high demand.
Bloomberg Intelligence analyst Kunjan Sobhani notes that the accelerated product-launch pace with the H200 in mid-2024 will likely strengthen Nvidia’s market position. The new AI processor, featuring high-bandwidth memory, is anticipated to be a top-performing GPU, setting a higher standard for the competition. Nvidia faced pressure last month due to new U.S. rules restricting the sale of its cutting-edge AI chips to China. The company is scheduled to report earnings on November 21.
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