Nvidia Shares Nears New Record as AI Spending Continues

Aug 21, 2024 thejournalbiz

Chipmaker has seen a dramatic rally before next week’s results.

Capex intensity suggests AI spending levels are sustainable.

Nvidia share fluctuation

@nvidia shares have seen a dramatic rally before next week’s results#nvidia #chips #ai pic.twitter.com/nGOqW7KYpk

— The_Journalbiz (@the_journalbiz) August 21, 2024

Bloomberg chart

Companies are pouring tens of billions of dollars into building out AI infrastructure and services, making the beneficiaries — notably Nvidia Corp. — close to a sure thing in terms of their growth prospects.

The chipmaker’s results next week will provide further clarity on AI demand and could vault the shares back into record territory.

“We’re nowhere near finishing the build-out of AI infrastructure, and that gives you a perfect line of sight in terms of the growth you can expect over the coming years,” said Erik Swords, lead portfolio manager at Voya Investment Management.

Rather than being in the late innings of this theme, “We’ve barely walked out of the dugout,” Swords said. “So while we’ll see volatility over the short term, I don’t have any concerns about where these AI hardware stocks are trading over the medium or long term.”