Boosted by Intel’s better-than-expected earnings report, NVIDIA (NVDA) shares surged sharply on Friday, closing with a market value exceeding $5 trillion for the first time. Around midday Eastern Time, NVIDIA’s stock was up 4.9%. Since the end of 2022, the stock has risen more than 14-fold, making it one of the biggest beneficiaries of the artificial intelligence wave.
Intel (INTC) reported an estimated earnings per share of $0.29 last night, far surpassing analysts’ expectations of just $0.01, while its sales of $13.6 billion also exceeded the anticipated $12.4 billion. Intel’s stock subsequently skyrocketed over 23%, marking its best single-day performance since 1987. Driven by this, AMD rose nearly 14%, and Qualcomm gained over 11%, indicating that market capital is flowing back into the AI and semiconductor sectors.
Over the past three years, NVIDIA’s stock price has climbed 650%. Its graphics processing units (GPUs) have become the standard AI chips powering large language models. In this field, Intel is almost entirely lagging behind, so NVIDIA investors are not worried about competition from Intel.
The greater concern has been that, despite massive investments in purchasing chips and building data centers for AI, customers generate very little revenue from charging for AI services, meaning most of NVIDIA’s major clients are still operating at a loss. Therefore, any sign of a potential slowdown in business would trigger alarm. Intel’s announcement last night—that its first-quarter sales grew 7% year-over-year and are expected to increase about 5% sequentially in the second quarter—has helped alleviate some market concerns about weakening demand.
In short, Intel’s earnings report has set a positive stage for NVIDIA, confirming robust demand for AI chips ahead of NVIDIA’s own earnings release next month. With a price-to-earnings ratio of 41 times and projected earnings growth of 40% over the next five years, investors have reason to maintain confidence in NVIDIA.
As a core supplier of AI infrastructure, NVIDIA’s GPUs are widely used by cloud computing giants such as Alphabet (GOOG), Microsoft (MSFT), Meta Platforms (META), and Amazon (AMZN), and are also a crucial chip supplier for major large-language-model developers like OpenAI and Anthropic. However, competitive risks are heating up. Alphabet recently announced a new self-developed chip, which it plans to make available to cloud customers later this year to challenge NVIDIA’s products. As major tech companies accelerate their own chip development efforts, NVIDIA’s long-standing monopoly advantage may face tests.
Previously, driven by geopolitical factors that pushed up oil prices and supply chain disruptions, investors had reduced their holdings of major tech stocks. But with market confirmation that demand for AI infrastructure shows no signs of slowing, the tech sector has recently regained favor. The tech-heavy Nasdaq Composite Index has risen 15% month-to-date and is on track for its best monthly performance since April 2020. Market focus is now shifting to the upcoming earnings reports from major tech companies next week, with investors broadly expecting that leading cloud service providers will maintain high capital expenditures, further reinforcing the outlook for continued expansion in AI computing power demand.
