NVDA

This is exactly what nearly every heart in the market should have anticipated, and so, this finally happened. NVIDIA stock has gone onto new highs, meaning the Wall Street community enters the next stage of the AI-led rally. A gradual preparation was conducted thoroughly in the previous two weeks, when NVIDIA charts shaped a proper technical basis to consolidate at a stone's throw distance from historical peaks, generally between $130 and $140 per share. The phase of a remote bullish fire took effect. The Wall Street crowd grew accustomed to purchasing shares of the AI flagship despite continuous price hikes. As a result, most funds and private traders simply refrained from profit-fixing temptations at a crucial moment when the chip rebels' captain firm soared through the former sky to reach fresh Himalayan peaks around $144.

Contributing to this rally Taiwan Semiconductor (TSM) announced a remarkable 54% growth YoY in its quarterly profits only a few days ago. TSM immediately added double digits percentage to its market value. Reaching new levels by TSM shares, even against the background of regional geopolitical risks and U.S. export controls, gave a big hope for other global leaders of the chip segment. With the firm being one of NVIDIA's largest partners, TSM management noted late last week that AI demand is "real" and "sustainable", projecting a contribution from server AI processors to TSM's revenue would be "more than triple" in 2024.

News came from Microsoft (MSFT) as the second largest company in terms of market caps on Wall Street informed its shareholders about rising its orders for NVIDIA's Blackwell GB200 chips in the current quarter, from 400 to 1,450 racks. NVIDIA is launching Blackwell chip shipment in early 4Q24, with supposed volumes are about 150,000-200,000 units, planning 500,000 to 550,000 units in Q1 2025. Other large players like Dell are consumers of Blackwell chips as well, and many of them may follow Microsoft's example to buy more new-generation chips to promote AI options.

As to some latest estimates of the whole chip segment, many analysts are also brave and optimistic. One bright example is Dan Ives at Wedbuch who shared a view that overall AI infrastructure market opportunity "could grow 10x from today through 2027", with AI cap-ex spending around $1 trillion for the next generation of chips being "on the horizon over the next 3 years". This context can conjure up dreams of stratospheric heights like $180 or even $200 per share yet to come within the nearest 12 months. Yet, even humble targets just $10-15 above $150 per share may lead the S&P 500 broad market barometer to record levels well above 6,000 points, as soon as political dust after U.S. elections settles.