Nvidia
shares were heading for new highs Friday as earnings reports from
Meta Platforms
and
Amazon.com
boosted the technology sector. Results from the major tech companies demonstrated their commitment to investment in artificial-intelligence technology, backed by Nvidia’s hardware.
Nvidia
shares were up 2.9% in early trading Friday at $648.28. The stock closed 2.4% higher at a record $630.27 on Thursday.
The tech sector as a whole was rallying off the back of earnings but there was plenty of specific encouragement that Nvidia’s graphics-processing-units will be continue to be in high demand for training AI systems.
Meta
said it expects its full-year 2024 capital expenditure to be in the range of $30 billion to $37 billion. That’s up from prior guidance of $30 billion to $35 billion given three months ago.
“Meta’s commitment to AI, which is evident in its recently announced substantial investment plan, includes billions in Nvidia chips to build a strong compute infrastructure for AI development,” said Mayuranki De, a research analyst at exchange-traded fund provider Global X.
Amazon
wasn’t as specific with its own guidance but it said it expects capex to increase due to AI investments. Analysts expect its 2024 capex to come to $59.9 billion, up from $52.6 billion last year.
“Results from top U.S. cloud customers suggest solid motivation for
spending in genAI [generative AI],” BofA Global Research analyst Vivek Arya wrote in a research note Friday.
As for Nvidia’s own coming earnings report, the BofA analyst said he would be looking for a beat of between 3% and 5% against consensus revenue expectations of $20 billion for the January quarter and $21.4 billion for the April quarter.
Arya raised his target price on Nvidia stock to $800 from $700 previously and maintained a Buy rating. The new target is based on a price-to-earnings multiple of 31 times Nvidia’s forecast 2025 earnings.
Nvidia was rising alongside other providers of computing hardware.
Advanced Micro Devices
was up 4.3% in early Friday trading while
Broadcom
was up 1.7%. The
S&P 500
gained 0.2% and the Nasdaq Composite was up 0.6%.
Nvidia shares have climbed 27% so far this year while the S&P 500 and Nasdaq Composite are up 2.9% and 2.3% respectively, as of Thursday’s close.
Write to Adam Clark at adam.clark@barrons.com
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