Nvidia Stock Surges 9% in Two Days on AI Chip Rally

Shares of Nvidia (Nasdaq: NVDA) jumped another 3 percent Thursday to close at $213.53, extending a two-day surge of over 9 percent as a rally in semiconductor stocks gained momentum. The move, which pushed the S&P 500 to a fresh record, was triggered by rival Advanced Micro Devices (Nasdaq: AMD) delivering blowout earnings and raising its outlook on soaring AI chip demand.

The rally found validation from Wall Street, with Goldman Sachs upgrading AMD to Buy and raising its price target to $450. The bank cited growing confidence in AMD’s AI accelerators and EPYC server CPUs, a move that gives institutional buyers cover to chase the rally in a sector that has already run hard.

The frenzy began after AMD reported a 38 percent year-over-year revenue increase to $10.25 billion for the first quarter, beating consensus estimates. The company raised its second-quarter guidance to $11.2 billion, signaling that the AI data center buildout is expanding beyond Nvidia. Nvidia stock climbed 5.8 percent Wednesday in response, while peers Super Micro Computer (Nasdaq: SMCI) jumped 15.3 percent and Lam Research (Nasdaq: LRCX) gained 7.2 percent.

This dynamic confirms the investment thesis that the market for AI accelerators is large enough to support multiple winners, challenging the view that it was a zero-sum game between Nvidia and its rivals. While Nvidia still dominates the space, AMD’s success in securing a major deal with Meta Platforms (Nasdaq: META) for its MI450 GPUs shows it is capturing a meaningful share of hyperscaler spending, a trend investors are now pricing in across the sector.

AI Spending Broadens, Lifting All Boats

The core of the rally is the validation that AI capital spending is not just an Nvidia story. AMD’s data center revenue soared 57 percent year-over-year to $5.78 billion, carried by demand for its server processors and the new AI accelerators. The deal with Meta to deploy up to 6 gigawatts of AMD Instinct GPUs was a specific proof point that analysts seized on. TD Cowen lifted its AMD price target to $500 and Morningstar raised its target to $450, both citing the new agreement with Meta as a key factor.

The enthusiasm spilled across the market, pushing the Nasdaq Composite up 1.5 percent and the Dow Jones Industrial Average 1.1 percent higher on Wednesday. The gains were supported by a broader risk-on mood, as easing US-Iran tensions caused oil prices to fall, reducing inflation fears. A stronger-than-expected ADP private payrolls report further reinforced the soft-landing narrative, giving the Federal Reserve more room to maintain its current policy stance. For investors, this combination of strong tech earnings and a stable macro backdrop provides a constructive environment for growth stocks, with the semiconductor sector at its epicenter.

This article is for informational purposes only and does not constitute investment advice.