Nvidia shares head for fifth day of gains as Wall Street remains bullish on artificial intelligence

Shares of Nvidia ( NVDA ) rose more than 3% in afternoon trading on Tuesday, putting the stock on pace for a fifth straight day of gains.

Wall Street analysts at KeyBanc, Citi ( C ), Bernstein and several other investment firms reiterated their Buy ratings on the stock this week.

KeyBanc analysts raised their fiscal 2025 sales outlook for Nvidia from $128.5 billion to $130.6 billion, with Nvidia’s new flagship Blackwell AI chips contributing $7 billion to fourth-quarter revenue . That’s higher than the Wall Street consensus estimate of $125.6 billion in 2025 revenue, according to Bloomberg data. Even as production of Nvidia’s Blackwell chips ramps up, KeyBanc said in a note to investors on Monday that demand for Nvidia’s earlier models of AI chips — the H100s and H200s — “remains extremely robust.”

Shares of Nvidia are up 13% in the past week and up 189% year-to-date.

Wedbush analysts said “another positive data point” for Nvidia is a potential new wave of funding for AI startups. The Information reported Monday that OpenAI’s stunning $6.6 billion funding round is likely to drive a wave of new investment in AI. New funding for AI-related startups would in turn fuel demand for Nvidia’s AI chips.

Wedbush’s Matt Bryson said Tuesday that the report is an indication “that AI spending growth is unlikely to stop for much (if not all of 2025) to NVDA’s benefit.”

Nvidia is also looking to prove its value beyond AI hardware. At its AI Summit in DC this week, the company is trying to highlight the power of its AI software offerings in an attempt to prove it’s more than just a chipmaker.

Adding to the wave of positive press for Nvidia was the announcement of the new Foxconn megafactory assembling Nvidia’s AI servers. Electronics maker Foxconn ( 2354.TW ) Chairman Young Liu said during an annual event in Taipei on Tuesday that it is building the world’s largest factory to assemble Nvidia GB200 servers in Mexico, according to the Financial Times. Liu said there is “crazy” demand for Nvidia’s latest AI chips. The move will reduce Nvidia’s reliance on China amid rising trade tensions.

Nvidia and Foxconn said they are also working to build Taiwan’s fastest supercomputer.

Nvidia isn’t the only semiconductor company doing well. Citing semiconductor industry WSTS data, JPMorgan ( JPM ) said Tuesday that sector-wide sales rose 28 percent in August from a year ago.

“We remain bullish on semiconductor and semiconductor equipment stocks as we believe stocks should continue to rise in anticipation of better supply/demand in 2H24/25 (H2 2024 and 2025) and trends stable/increasing earnings power in CY24/25. (calendar years 2024 and 2025).”

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The PHLX Semiconductor (^SOX) and Nasdaq (^IXIC) both rose more than 1% on Tuesday.

Meanwhile, China’s chipmakers faced a different fate on Tuesday. After China’s economic planning agency failed to live up to market hopes for more stimulus measures, China Semiconductor Manufacturing International Corp ( 0981.HK ) fell 18 percent. Investors were expecting stimulus initiatives to boost China’s semiconductor sector.

Laura Bratton is a reporter for Yahoo Finance.

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