NVIDIA's Zeppelin continues to build the stairway to heaven for the rest of the IT segment. Its share price hit the next $1150 sky this week. The leading AI chipmaker's market value is approaching $2.8 trillion, being only at a $100 billion distance from the current capitalisation of Apple, which is the second-most valuable company on Wall Street after Microsoft. As a result, the tech-heavy Nasdaq Composite index closed the regular session of May 28 above 17,000 for the first time ever, creating a solid basis for more rallies to the upside. New highs on both Nasdaq 100 (USTech100) and S&P 500 (US500) contracts are only a matter of time and probably a short wait, even though the price charts for Nasdaq 100 futures adjusted by nearly one percentage point down in the pre-market trading on Wednesday. So, any temporary dips above 18,500 could be used to open new long positions in USTech100, with an initial target price being placed in the direct vicinity of 20,000. For the S&P 500 futures, 5,500 points are considered as the next reasonable target.

Then came remarks by Minneapolis Federal Reserve chief that interest rate hikes are not completely ruled out when he said yesterday during an event in London that "the odds of US raising rates are quite low, but I don’t want to take anything off the table”, as "many more months of positive inflation data" are needed to give confidence that "it’s appropriate to dial back”, according to his recent interview with CNBC. If one would only ask my opinion, this kind of rhetoric may be good to postpone the effects of growing bullish appetite but far from being enough to cancel our hearty dinner.

As to another loud informational occasion behind this round of NVIDIA rally, the AI indisputable leader soared by 6.98% in one trading day, additionally boosted by a blog post of Elon Musk’s startup xAI, which raised $6 billion in a bid to challenge OpenAI. Several months ago, Elon Musk launched Grok to create a potentially strong rival to OpenAI’s ChatGPT, currently a partner of Microsoft. Grok has been trained on to be integrated into X.com, the social network formerly known as Twitter, led by executives with previous experience at Alphabet’s DeepMind, Microsoft and Tesla. Elon Musk had been an early supporter of OpenAI but later withdrew his capital from OpenAI, citing potential dangers of the technology. Later, Musk called for a pause in AI development.

Now the newly raised funds will be reportedly applied to bringing xAI’s first products to market, building advanced infrastructure, and accelerating work on future technologies. In a partnership with Oracle, xAI is planning to make a massive supercomputer, having it operational by fall 2025 to power the next version of Grok. And clusters of NVidia’s flagship H100 graphics processing units (GPUs) would be at least four times the size of the largest GPU clusters currently in existence.

This intensifies the competition for NVidia chips between giant companies such as Meta, Google and Microsoft, but this completion will ultimately push all of them higher and higher. The demand for the chips would grow bigger, while the increasing highs example of NVidia stock is contagious in and of itself. This means that any technical breakthrough to be performed (almost inevitably) by Microsoft (MSFT) share price, above the nearest and historical resistance of $430 per share, would show it the highway to the next $480 to $500 area.