Nvidia (NVDA) is riding a wave of AI enthusiasm that has sent its stock price soaring to new highs after being battered in the early part of the year on fears of new AI models out of China and tariff threats.
On Friday, shares of Nvidia hit $157, up from $94 in April, marking a stunning turnaround for the world’s leading AI chip company.
The moves can be attributed to a number of factors turning in Nvidia’s favor, including the successful ramp of the buildout of its Blackwell chip line, the explosion in interest around so-called sovereign AI, and the company’s push into what it calls physical AI, or robotics.
Nvidia’s Blackwell ramp, the process of building out chips and increasing overall volume, has been a major win for the company. During its GTC Paris event earlier this month, Nvidia said it is now shipping 1,000 Grace Blackwell (GB200) server racks per week and is on track for its transition to its next-generation Blackwell Ultra-powered GB300 servers.
Getting its chips and servers out the door as fast as possible has been key for Nvidia, especially after earlier delays as the company began to ramp production of Blackwell chips in late 2024.
Nvidia said the GB300 line of chips will be able to slot directly into GB200 servers, which the company claims will make it easier for its customers to upgrade to its latest offerings.
Nvidia also continues to benefit from the seemingly insatiable demand for its chips from hyperscalers, including Amazon (AMZN), Google (GOOG, GOOGL), Microsoft (MSFT), Meta (META), and xAI, among others. According to CFO Colette Kress, large cloud service providers accounted for just under 50% of the company’s data center sales in its fiscal first quarter. And with hyperscalers expected to spend billions more on their AI buildouts in the coming months, there’s little reason to believe that will slow down anytime soon.
CEO Jensen Huang is also betting big on the idea of sovereign AI, or AI data centers built in specific countries to power their own AI needs. Huang was on hand during President Trump’s visit to the Middle East in May, during which Trump announced that Saudi Arabia and the United Arab Emirates (UAE) will be able to purchase thousands of Nvidia chips for their data centers.
One of those projects, the UAE’s Project Stargate, could include 100,000 Nvidia GPUs, according to Reuters.
Huang also touted sovereign AI plans for Europe during GTC Paris.
“The company is establishing AI technology centers in Germany, Sweden, Italy, Spain, UK, and Finland, and working with regional cloud and telco partners in France, UK, and Germany to build new AI datacenters with [tens] of thousands of Grace Blackwell systems and GPUs,” Bernstein analyst Stacy Rasgon wrote in an investor note following the event.
