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Nvidia Stock Hits Record High on xAI Supercomputer Deal

Analyst Team trader
Updated 29 May 2024

Shares of graphics chipmaker Nvidia (NASDAQ:NVDA) soared to an all-time high following reports that Elon Musk's artificial intelligence company, xAI, is embarking on an ambitious project to build a supercomputer. The anticipated deal, which involves the purchase of 100,000 semiconductors from Nvidia, promises to cement xAI's position in the burgeoning AI industry. This high-performance machine is expected to be fully operational by the fall of 2025, triggering market excitement and bullish sentiment among investors.

Elon musk sitting in chair looking pensive

Nvidia's stock price reflected this enthusiasm, peaking at an impressive $1,149.39 during intraday trading. By the end of the trading day, the share price still boasted a significant 7.13% increase, settling at $1,140.59. Such striking performance underscores the market's confidence in Nvidia's pivotal role in the advancing AI sector, further propelled by potential partnerships like the one with xAI.

The ripple effect of this development was also felt by Oracle Corporation (NYSE: ORCL), whose shares rose by 1.29% to $124.49 and AMD added 3.16%. The increase came amidst speculation that Oracle is considering a partnership with xAI for the supercomputer project, highlighting the possible synergies between established tech companies and emergent AI endeavors.

Recently, xAI concluded a successful $6 billion Series B funding round, earmarked for the development of innovative products, infrastructure, and future technologies. This massive influx of capital not only represents a vote of confidence from investors but also positions xAI as a formidable counterpart to other industry players.


In a noteworthy shift within the competitive landscape, Elon Musk has publicly distanced himself from Microsoft-backed OpenAI. His chief concern is OpenAI's perceived lack of transparency, which contrasts sharply with xAI's commitment to an open-source philosophy. This approach is embodied by Grok, xAI's chatbot, designed to foster transparency and collaboration in AI development.

In the wake of xAI's announcement, other AI-related stocks experienced a favorable push. Advanced Micro Devices (AMD), ON Semiconductor, Arm, and Micron Technology all enjoyed an uptick, signaling broader investor optimism in the AI technological race.

Nvidia's robust financial position combined with this most recent deal illustrates the company's growth potential within the AI domain. The current surge in stock prices reflects the confidence investors have in Nvidia's capability to lead and innovate.

Elon Musk's strategic initiatives through xAI, particularly the supercomputer project and the company's successful funding rounds, solidify xAI's presence as a burgeoning heavyweight in the AI industry. Such advancements not only mark progress in the field but also underscore the importance of strategic partnerships and the economic potential of AI technology.

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The AskTraders Analyst Team features experts in technical and fundamental analysis, as well as traders specializing in stocks, forex, and cryptocurrency.