NVIDIA’s stock recently rebounded after a period of underperformance fueled by concerns over declining chip demand. This came after reports that DeepSeek, a Chinese AI firm, had developed a more advanced chatbot using fewer AI-specific chips than its American competitors.
On Wednesday, NVIDIA’s stock surged 5.35% to $124.83 on the New York Stock Exchange, pushing its market capitalization back above $3 trillion to $3.057 trillion.
The rally appears to have gained momentum as major U.S. tech companies highlight substantial AI investments in their earnings reports.
In its latest earnings report, Alphabet Inc. revealed that despite missing market expectations last quarter, it plans to invest $75 billion in AI this year—far exceeding the initial estimate of $57.9 billion.
This announcement helped fuel NVIDIA’s stock surge.
Vivek Arya, an analyst at Bank of America (BoA), maintained a ‘buy’ rating on NVIDIA with a price target of $190. In a note to clients, Arya emphasized that cloud capital expenditures remain strong.
With NVIDIA trading at $124, his target suggests a potential upside of 53%.
Arya also noted that despite DeepSeek’s innovations, major NVIDIA customers such as Microsoft and Meta continue to invest heavily in AI, reinforcing NVIDIA’s position as the industry’s leading supplier.
While this optimism propelled NVIDIA’s stock up more than 5% in a single day, the stock remains down about 10% year-to-date, primarily due to concerns over DeepSeek’s rapid advancements.