Nvidia shares saw a 3% increase before the bell on Thursday, poised to solidify the company’s position as the most valuable semiconductor company in the world. This surge came after partners Dell and Super Micro Computer received server orders for Elon Musk’s AI startup. Dell Technologies and Super Micro Computer also experienced gains of 3.8% and 4.8%, respectively. These companies manufacture servers that are equipped with Nvidia chips, allowing them to benefit from the growing demand for processors that power AI applications.
On Wednesday, Musk announced that Dell and Super Micro are providing server racks for xAI’s supercomputer, which will enhance the capabilities of its AI tool, Grok. Musk revealed earlier this year that training the Grok 2 model required approximately 20,000 Nvidia H100 graphic processing units, and future models like Grok 3 would need 100,000 Nvidia H100 chips. Longbow Asset Management’s CEO, Jake Dollarhide, highlighted the fact that Nvidia generates substantial profits from AI, unlike Microsoft, which both spends and makes money in the field.
In the current year, Nvidia’s stock price has nearly tripled, contributing to gains in the broader market. Super Micro’s shares have also tripled in value, while Dell’s stock has increased by almost 95%. The semiconductor sector as a whole has shown positive growth, with the Philadelphia SE Semiconductor Index rising nearly 34% since its recent low in April and reaching a record high on Tuesday.