Nvidia Stock Gains. Why Shares Are Rising Even Though the Market Is Not.

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

Nvidia stock was edging higher on Friday as optimism about artificial-intelligence investment looks to be outweighing wider market jitters and a deeper rift between U.S. chip makers and China.

Nvidia stock was up 0.7% at $183.08 on Friday after closing up 1.1% on Thursday. Nvidia’s move comes in a market that is broadly flat, with the S&P 500 little changed.

Among other chip makers, Advanced Micro Devices was down 0.7% and Broadcom was off 2.7%.

The chief driver for Nvidia continues to be expectations of heavy spending on its hardware. Cloud-computing company Oracle —a significant customer for Nvidia—said Thursday it expects its AI cloud server-rental business to generate 2030 revenue of $166 billion. That would represent a 75% annual growth rate from $10 billion in fiscal 2025, bolstering optimism about the duration of the AI boom.

Another factor affecting chip stocks could be assessments of the chances of resuming sales to China. Memory-chip maker Micron Technology is set to stop supplying server chips to Chinese data centers after being targeted by a ban from Beijing on the use of its products in critical infrastructure, Reuters reported Friday, citing people briefed on the decision.

Micron didn’t immediately respond to a request for comment early on Friday.

Nvidia has also been targeted by Chinese authorities, who have discouraged the use of its artificial-intelligence processors by domestic customers.

In the past four quarters, Nvidia’s China revenue accounted for 12% of the company’s global total, down from 21% a year earlier. Nvidia is currently forecasting no Chinese revenue for its current quarter, which implies a loss of between $2 billion and $5 billion in potential sales, according to the company’s executives.

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