Nvidia Stock Gains. What’s Driving the AI Chip Maker.

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

Key Points

• Nvidia shares rose 0.6% to $199.82 in early trading after a 4% drop on Tuesday, amidst broader concerns about AI company valuations.
• UBS analysts increased their global AI capital expenditure estimates to $423 billion for this year and $571 billion for 2026.
• The Trump administration confirmed it does not intend to push for sales of Nvidia’s latest AI hardware to China.

Nvidia stock was edging up early on Wednesday after worries about the artificial-intelligence trade hit the chip maker the previous day.

Nvidia shares were up 0.6% at $199.82. The stock fell 4% on Tuesday, along with shares of other companies seen as benefiting from the rise of AI.

There is increased attention on the valuations of companies exposed to the AI boom as big bank executives warned of a potential pullback this week. However, that is being weighed against continued investment in infrastructure.

Fellow chip company Advanced Micro Devices initially dropped as much as 5% following its earnings in a kneejerk selloff. But it climbed 0.4% in morning trading as AMD executives said “demand for compute has never been greater” on a call with analysts.

Analysts at UBS raised their estimates for global AI capital expenditure to $423 billion this year and $571 billion in 2026, from $375 billion and $500 billion previously.

“The anticipated growth of agentic AI—AI systems capable of autonomous decision-making and action—and physical AI, such as robots and autonomous vehicles, should spur greater demand for AI compute,” wrote Mark Haefele, chief investment officer at UBS Global Wealth Management, in a research note on Wednesday

Meanwhile, the Trump administration confirmed that it doesn’t intend to push for sales of Nvidia’s latest AI hardware to China after President Donald Trump and Chinese leader Xi Jinping didn’t discuss the topic at their meeting in South Korea last week, White House press secretary Karoline Leavitt said Tuesday.

“As for the most advanced [Nvidia] Blackwell chip, that’s not something we’re interested in selling to China at this time,” Leavitt said.

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