Shares of Nvidia (NASDAQ: NVDA) were climbing again today even though there was no company-specific news on the artificial intelligence (AI) stock juggernaut. However, AI stocks have a tendency to move in unison, and good news from fellow traveler Super Micro Computer (NASDAQ: SMCI) seemed to lift Nvidia stock as well.
Super Micro shares jumped after the S&P Global said that the maker of servers and storage equipment that are especially valued for AI applications would join the S&P 500 on March 18. The news acts as a broader stamp of approval for Super Micro and the rest of the AI sector and seemed to spark a new round of euphoria as investors piled into these stocks again.
Nvidia closed at 3.6% after trading up as high as 6.6% earlier in the session, while Super Micro Computer had gained 25.3%. Among the other winners in the AI space were Intel and Taiwan Semiconductor Manufacturing, which both finished up more than 3%.
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A rising AI tide lifts all boats
After having a banner year in 2023, Nvidia has gotten out to a breakneck start in 2024 as the stock is now up roughly 75% year to date.
Nvidia's own strong fourth-quarter results have helped drive those gains, but it's also surged nearly every time there's been good news out on a peer. For example, last Friday the stock gained when Dell Technologies said it was seeing surging demand for AI servers, and earlier in February, it rose on strong quarterly results from Arm Holdings, a close partner in chip design.
Both Super Micro and Nvidia are experiencing massive revenue growth from AI-related demand, and they have been two of the biggest winners from the AI boom. Therefore, it's not surprising to see Nvidia responding to good news for Super Micro.
What's next for Nvidia
Updates from companies in recent weeks have shown that the AI boom is only picking up steam as cloud-computing companies and others build out their AI infrastructure and products like Nvidia's graphics processing units (GPUs) remain in high demand.
Later this week, we'll get an update from Broadcom, known for its strength in networking chips which are expected to play a role in AI, and next week Arm Holdings' initial public offering (IPO) lock-up period will expire, which could lead to volatility in that stock.
Either of those events could move Nvidia stock as well. Expect Nvidia to continue to be volatile on broader AI news, though the surge in demand for AI products makes the stock more likely to go up than down.
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Jeremy Bowman has positions in Broadcom. The Motley Fool has positions in and recommends Nvidia, S&P Global, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom, Intel, and Super Micro Computer and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
