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Nvidia welcomes the ChatGPT Hype!

The chipmaker’s stock has rallied 29% since the start of the year!

Nvidia s on a wide rally and is the best stock performer in the S&P 500 Index.

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Bloomberg chart on Nvidia stock performance

Contributing to the gains has been the hype around the chatbot released by OpenAI late last year that has demonstrated an uncanny capacity to mimic human writing.

Nvidia dominates the market for graphics chips designed for complex computing tasks needed to power AI applications. The more people use ChatGPT, the more computing power its owner OpenAI requires to generate responses to the millions of queries received from lazy students with essay assignments or struggling songwriters.

Microsoft Corp. announced that it looks forward to investing in OpenAI

The funding is needed by OpenAI to ramp up computing power and will likely only bolster demand for Nvidia chips. Shares of Nvidia jumped as much as 6.5%.

Last week, Citigroup Inc. estimated that rapid growth in ChatGPT usage could result in sales for Nvidia of $3 billion to $11 billion over 12 months.

Bank of America Corp. said Nvidia is at the forefront of the companies that stand to benefit from growth in so-called generative AI. Nvidia are well positioned to take advantage of more significant computing needs required by AI models like ChatGPT.

After sales surged more than 50% in each of Nvidia’s past two years, revenue is projected to be flat in fiscal 2023 at about $27 billion.

Nvidia shares have lost almost half their value since peaking in November 2021. Despite the selloff, the stock remains one of the most expensive in the Nasdaq 100