Nvidia was once again on the move after the world’s three biggest cloud companies, along with Meta Platforms , guided spending higher last week to keep pace in the artificial intelligence arms race. Some, if not much, of that spend should continue to fill the coffers of the Jensen Huang-run AI chip king. Club stock Nvidia on Monday soared another 4% to another all-time high — around $5.12 trillion in market value. In the run-up to next week’s earnings, we would expect to see more analysts raise their quarterly estimates and price targets on Nvidia. The stock closed above $5 trillion for the first time last Wednesday. Three trading days later, it added nearly $100 billion in market cap. In a Monday note to clients , Loop Capital raised its Nvidia price target to $350 per share from $250. The analysts acknowledged that the 70% upside from Friday’s close built into their PT over the next four to five quarters sounds crazy. But they believe their “work suggests NVDA is about to begin a ramp of GPU that will essentially double its unit shipments in the next 12-15 months, while seeing the benefit of [average selling price] expansion and networking.” Loop’s note came out ahead of two major Nvidia developments before Monday’s opening bell. First, Microsoft said it secured export licenses to ship Nvidia chips to the United Arab Emirates. Second, Amazon got a $38 billion commitment from OpenAI to use AWS, the largest cloud, for more compute, tapping hundreds of thousands of Nvidia graphics processing units (GPUs). Microsoft’s Azure and Google Cloud at the second and third biggest, respectively. On Friday, we learned the South Korean government, along with key South Korean industrial companies including Samsung, Hyundai, and others, is working with Nvidia “to expand the nation’s AI infrastructure with over a quarter-million Nvidia GPUs across its sovereign clouds and AI factories.” The idea is for various South Korean entities, some government-funded, others private, to source Nvidia chips and build out various data centers with the infrastructure forming a “foundation for AI-enabled economic growth and innovation across Korea’s industries, including automotive, manufacturing, and telecommunications.” Remember, Nvidia made its own OpenAI deal in September, announcing a $100 billion investment into OpenAI to help the latter build out 10 gigawatts of artificial intelligence data center capacity. NVDA 5Y mountain Nvidia performance over 5 years All these updates come as it is becoming increasingly clear that access to AI infrastructure is not only important for businesses looking to compete against one another, but also fast becoming a national security issue. Governments must be proactive in securing supplies of the cutting-edge accelerated computing platforms – at this point, the latest products from Nvidia are so far beyond simply being chips – if they are to compete in a world in which data is gold and cyberattacks can cause billions of dollars worth of economic damage. Though there is no denying that the gains tied to the AI trade have already been nothing short of incredible, there is still so much more room to run. That doesn’t, however, mean those gains will be made in a straight line. We must consider that while AI is real and the demand is certainly there, many companies being bid up still do not generate earnings, and in some cases may not even be generating sales yet. We wouldn’t advise playing in that part of the speculative arena. While we have to consider that bubble-like froth in one part of the market can seep into other parts or that a popping of those micro bubbles in the nuclear and quantum can cause collateral damage in less speculative names, the most recent updates support the idea that investors need to maintain exposure to the highest quality AI players, and that for all the millionaires it has already minted , Nvidia’s best days still lie ahead. (Jim Cramer’s Charitable Trust is long NVDA, MSFT, AMZN, META. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
