By Adam Clark
Nvidia was rising early Wednesday as the market looked for a potential bargain in the chip maker's stock. Evidence of more money flowing into artificial-intelligence infrastructure should help.
Nvidia shares were up 2.3% at $118.52 in premarket trading. The stock rose 1.7% on Tuesday, as it bounced off its lowest levels since September last year.
Among other chip makers, Advanced Micro Devices was rising 1.1% and Broadcom was gaining 2.5% in premarket trading.
At the start of the week Nvidia stock tumbled to its lowest closing level since September last year on the Trump administration's imposition of levies on imports from Mexico, Canada, and China. That raised fears of similar levies being placed on Taiwan, where Nvidia's chips are manufactured, as well as further curbs on exports of semiconductors to Chinese customers.
However, as Barron's has noted, the drop coming on top of a decline after Nvidia's earnings has left the chip company's stock looking relatively cheaply valued compared with its growth as companies keep spending big on AI infrastructure.
The latest evidence comes from Taiwan's Foxconn -- also known as Hon Hai Precision Industry -- which reported on Wednesday that its revenue for the first two months of the year was up 25% from 2024. Foxconn, which is a major manufacturer of servers containing Nvidia chips, said it expects a strong first quarter.
It's just the latest sign of a steady flow of funds into the AI sector. Amazon.com-backed AI start-up Anthropic raised $3.5 billion at a $61.5 billion private-market valuation this week, partly to be used to invest in computing capacity.
Meanwhile, CoreWeave, a cloud-computing provider which has backing from Nvidia, filed for its initial public offering earlier this week and said on Wednesday that it had agreed to acquire Weights & Biases, an AI developer platform. CoreWeave's revenue grew more than 700% year over year to $1.9 billion in 2024, according to its IPO prospectus filing. The company posted a net loss of $863 million for 2024.
Write to Adam Clark at adam.clark@barrons.com
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March 05, 2025 05:14 ET (10:14 GMT)
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