Expectations for Rising Big Tech AI Chip Demand... Nvidia Hits Record High Again

Rose to $176.98 During the Day

Nvidia, an artificial intelligence (AI) semiconductor manufacturer, has once again reached an all-time high, driven by expectations of increasing AI chip demand from big tech companies.

Reuters Yonhap News

On July 28 (local time) on the New York Stock Exchange, Nvidia closed at $176.75, up 1.87% from the previous session. During the day, the stock rose as high as $176.98, surpassing the previous record high of $174.25 set on July 18, just 10 days earlier. At the beginning of this month, the share price was $153.30, meaning it has climbed nearly 15% in July alone. Its market capitalization has also surged to $4.31 trillion, widening the gap with second-place Microsoft (MS), whose share price fell 0.24% to a market cap of $3.809 trillion. This relentless rally in Nvidia shares also pushed the tech-heavy Nasdaq index to a new all-time high, closing at 21,178.58, up 0.33% from the previous trading day.

Previously, Nvidia set a new record high on news that it would resume sales of its H20 chips to China. Now, the market is increasingly expecting that big tech companies such as Microsoft, Meta, Apple, and Amazon, which are set to announce their earnings this week, will continue to drive strong demand for AI chips. In fact, purchases of AI chips by these companies account for more than 40% of Nvidia's total revenue.

On July 23, Google announced earnings that exceeded market expectations and stated it would increase its AI infrastructure investment by $10 billion. This raises its annual capital expenditure target, which was expanded to $75 billion in February with its broader AI strategy, to $85 billion. This decision is seen as being based on robust AI demand, as Google is integrating AI comprehensively across its main services, including Search, YouTube, and Cloud. Google cited "strong demand for our cloud products and services" as the reason for the investment expansion.

Meta has also announced plans to invest hundreds of billions of dollars in computing infrastructure over the coming years, raising the possibility that it may revise its capital expenditure (CAPEX) guidance upward in the upcoming earnings announcement.

There are also expectations that Amazon will unveil aggressive spending plans in response to intensifying competition and growing AI demand. Andy Jassy, Amazon's CEO, said in the previous earnings announcement that "new AI capacity is consumed as soon as it comes online," highlighting the explosive pace of AI chip demand.

This content was produced with the assistance of AI translation services.