Nvidia's Stock Surges to Record Close as AI Chip Trade Reloads

January 6, 2025

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Nvidia Corp.'s stock is poised to close at a fresh high, reflecting the extraordinary momentum in the artificial intelligence (AI) chip sector this year.

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On Monday morning, Nvidia shares rose 3.8%, positioning the stock for its first record close since November 7, according to Dow Jones Market Data. The stock has shown consistent gains across the year’s first three trading sessions, including Monday. Trading around $150, Nvidia’s shares remain slightly below their November 21 intraday peak of $152.89.

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Despite a loss of steam in the chip sector late last year, semiconductor stocks have started 2025 on a strong note, with this week shaping up to be pivotal. Positive monthly results from contract manufacturer Hon Hai Precision Industry Co., commonly known as Foxconn, signal robust sector trends. Additionally, Nvidia’s Chief Executive Jensen Huang is set to deliver a highly anticipated keynote at the Consumer Electronics Show (CES) Monday evening.

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Mizuho analyst Jordan Klein expressed optimism in a Monday note, suggesting investors might hesitate to sell AI-focused semiconductor stocks before Huang’s keynote. Klein noted potential announcements about new products or previews of next-generation graphics processing units (GPUs), such as the upcoming Rubin system.

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Foxconn’s recent report highlighted “strong demand from AI servers,” which contributed to significant growth in its December cloud and networking revenue compared to the prior year. Klein interpreted the report as an indication of a recovery in general server demand and acceleration in AI server adoption, spurred by product transitions tied to Nvidia’s Blackwell architecture.

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Foxconn management also hinted that revenue from servers, cloud infrastructure, and enterprise segments might surpass that of consumer-oriented businesses like smartphones and personal computers by mid-2025. This shift would be unprecedented for the company. Additionally, the report suggested a “smaller-than-seasonal” sequential decline in revenue for the March quarter, easing concerns among investors about Nvidia’s Blackwell rollout.

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Klein argued that an improved ramp for Blackwell in the first half of 2025, along with Nvidia’s promotion of an aggressive timeline for next-generation Rubin systems, could encourage stronger investment from institutional buyers in the AI-focused semiconductor and hardware markets.

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The semiconductor sector saw broad gains on Monday, with the iShares Semiconductor ETF (SOXX) climbing 3.7%—its largest single-day increase since a 4.3% jump on September 19, 2024, per Dow Jones Market Data.

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Within the sector, Super Micro Computer Inc. shares surged 12.2%, Micron Technology Inc. rose 9.9%, and Lam Research Corp. advanced 6.6%. These three stocks led the S&P 500's gainers for the day. Broadcom Inc. and Advanced Micro Devices Inc. also saw notable gains, with each stock up 3.4%.

The PHLX Semiconductor Index (SOX) showed strength across the board, with all components trading in positive territory.

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