Nvidia Stock Pops. This Helped Shake Off the AI Fear.

Nvidia chips are the favored hardware for training artificial-intelligence models. (Courtesy Nvidia)

Key Points

• Nvidia shares rose 1.3% in premarket trading, reaching $173.22, following positive earnings from Micron Technology.
• Micron Technology’s strong earnings report highlighted increased sales driven by data-center demand for high-performance memory.
• Atlas Cloud AI announced a $250 million investment to deploy 2,304 Nvidia Blackwell GPUs in California, part of a $6 billion plan.

Nvidia stock was rising early Thursday as upbeat earnings from Micron Technology helped dispel concerns about artificial-intelligence investment.

Nvidia shares were up 1.2% at $172.91 in premarket trading, while futures tied to the benchmark S&P 500 index were up 0.5%.

Among other chip makers, Advanced Micro Devices was up 1.6% and Broadcom was gaining 1.1% in premarket trading.

Nvidia stock had fallen 3.8% on Wednesday following a report that software and cloud-computing giant Oracle had run into problems with the funding of a $10 billion data-center project. Oracle said the project is still on track but AI companies still fell.

However, elsewhere there are signs of continued AI investment. Memory-chip maker Micron reported stellar earnings after the market close on Wednesday, saying data-center demand was driving increased sales of high-performance and high-capacity memory and storage.

“The [Micron] news helped to steady the stock prices of Nvidia, Oracle and Broadcom—three companies which have been hit badly recently on fears that the Artificial Intelligence (AI) trade was starting to unwind,” wrote David Morrison, a market analyst at Trade Nation.

Memory chips have become an increasingly important component of AI accelerators. In particular, a form of chip called high-bandwidth memory (HBM) is necessary as a component of the latest processors from the likes of Nvidia. The only worry is whether there will be enough HBM supply to meet the needs of AI chip makers.

“We believe that the aggregate industry supply will remain substantially short of the demand for the foreseeable future,” Micron CEO Sanjay Mehrotra said on an earnings call.

Separately, privately held start-up Atlas Cloud AI said Wednesday it would deploy 2,304 Nvidia Blackwell graphics-processing units at a site in California in partnership with data-center provider NewYork GreenCloud. The $250 million investment is the first in Atlas Cloud’s $6 billion plan to build AI computing sites across North America.

Write to Adam Clark at adam.clark@barrons.com