Nvidia stock was rising early on Friday, as the latest earnings reports from big technology companies showed continued investment in artificial-intelligence infrastructure.
Nvidia shares were up 3.3% at $853.52 in morning trading. The stock closed up 3.7% on Thursday.
Microsoft and Google-parent Alphabet emphasized their investment in AI technology in earnings reports on Thursday and their chief executives specifically noted their use of Nvidia chips in earnings calls with analysts, although both CEOs said they were using in-house chips as well.
“We offer the most diverse selection of AI accelerators, including the latest from Nvidia, AMD [Advanced Micro Devices], as well as our own first-party silicon,” said Microsoft CEO Satya Nadella.
“We offer an industry-leading portfolio of Nvidia GPUs [graphics-processing units] along with our TPUs [tensor processing units],” Alphabet CEO Sundar Pichai said.
While there were no particular details about new orders for Nvidia hardware from the two companies, their positivity on AI and their capital spending plans look to bode well for the chip maker. Microsoft said capital expenditure would “increase materially” in the current quarter and grow further in the next fiscal year. Alphabet’s first-quarter capital expenditure of $12 billion was ahead of consensus expectations of $9.9 billion and it is expected to be at or above the same level each quarter in 2024.
“On the AI front, more than 65% of the Fortune 500 are using [Microsoft’s] Azure OpenAI service.” wrote William Blair analyst Jason Ader in a research note on Microsoft on Friday. “Importantly, management noted that it is starting to see some supply constraints in AI, with demand modestly ahead of supply. This is prompting increasing capex investments ($11 billion in the third quarter), which should benefit suppliers like Nvidia,”
Among other chip makers, Advanced Micro Devices was broadly and Intel was down 12% in morning trading. The latter was suffering after itsguidance for the second quarterwas short of Wall Street estimates.
Nvidia shares have risen 67% this year to date through to Thursday’s close. That compares with a 5.8% rise in the S&P 500 index and a 4.0% rise in the Nasdaq Composite Index over the same period.
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