Nvidia (NVDA) shares climbed over 2% on Wednesday, buoyed by an industry report forecasting “unprecedented” investments in artificial intelligence, signaling a positive outlook for the AI chipmaker.
Bain & Company’s annual technology report, released on Wednesday, suggests that businesses will need to invest significantly in technology infrastructure to capitalize on the AI boom. The report highlights that the cost of large data centers, currently ranging from $1 billion to $4 billion, could skyrocket to between $10 billion and $25 billion over the next five years.
According to the research, both data center operators and hardware suppliers are set to benefit from a short-term surge in demand as companies and governments increase their spending on computing capabilities. Notably, the report projects that Nvidia could generate $10 billion in revenue from government AI investments in 2024, a remarkable rise from zero in the previous year.
In recent months, Wall Street has been keenly analyzing the sustainability of massive infrastructure spending and assessing the return on investment for companies purchasing AI chips.
Nvidia’s stock extended its gains on Wednesday after CEO Jensen Huang appeared to pause his share sales for now. Over the past few months, Huang has sold approximately $713 million worth of shares as part of a plan to divest 6 million shares by March 2025—a target he has achieved ahead of schedule. Despite these sales, Huang remains the company’s largest shareholder.
Since September 6, Nvidia’s shares have risen about 20%, and the stock has experienced a staggering increase of over 150% year-to-date.
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