By Investing.com– Shares of Nvidia rose sharply on Wednesday, underpinning a broader rally in technology stocks after Chief Executive Jensen Huang said the company was experiencing stellar demand for its artificial intelligence chips.
Speaking at a Goldman Sachs conference in San Francisco, Huang said that tensions had risen among Nvidia’s customers as they scrambled to obtain a limited supply of the company’s advanced AI chips, Bloomberg reported.
He said that the firm was experiencing strong demand for its newest generation of AI chips, called Blackwell, and said that companies would have no choice but to embrace “accelerated computing” to keep up with demand for AI.
NVIDIA Corporation (NASDAQ:NVDA) surged 8.1% to $116.86 on Wednesday, its biggest one-day gain in six weeks. But the stock fell slightly in aftermarket trade.
Huang said generative AI was still in an early stage, and it was likely that the technology will expand beyond data centers.
His comments come after Nvidia was hit with a bruising sell-off last week, after the guidance provided with its July-quarter earnings failed to meet some elevated expectations. Still, the stock is trading up about 150% so far this year.
Losses in Nvidia had also spurred a broader sell-down in the technology sector.
Goldman Sachs reiterated its Conviction Buy rating on Nvidia along with a $135.0 price target in a recent note.
The firm is at the heart of a massive, AI-driven valuation boom over the past year, and is expected to continue benefiting from a broader push into generative AI.
Nvidia makes the most advanced AI chips in the market, but counts on buying from a relatively small pool of technology giants for a bulk of its revenues.