Nvidia Stock Gains. How Elon Musk Is Lending a Helping Hand.

Nvidia chips are the preferred choice for training artificial-intelligence models. (Akio Kon/Bloomberg)

Nvidia was rising on Wednesday as the market looked ahead to technology earnings which are expected to show big spending on artificial-intelligence infrastructure.

Nvidia shares were up 0.9% at $168.52 in premarket trading. The chip maker’s stock fell 2.5% on Tuesday amid a wider slump in technology shares.

Nvidia tends to report at the end of earnings season. So the stock is likely to be driven in the coming weeks by earnings reports from other technology companies, kicking off with Google-parent Alphabet after the market close on Wednesday.

The most closely watched figure for Nvidia investors will be capital expenditure, which is largely being propelled by spending on data centers to power AI technology. Alphabet has previously said it expects to spend around $75 billion in capex this year and analysts expect $18 billion this quarter.

The race to build larger AI data centers appears to be hitting full speed. Tesla CEO Elon Musk said in a social-media post on Tuesday that his xAI start-up had 230,000 graphics-processing units training its Grok chatbot and the first batch of a further 550,000 Nvidia GPUs would go online in a few weeks.

Musk’s xAI is working with investment firm Valor Equity Partners to secure up to $12 billion to secure more Nvidia chips, The Wall Street Journal reported on Tuesday, citing people familiar with the matter. The processors will be leased to xAI as part of plans to have one million chips powering Grok, according to the WSJ.

xAI didn’t immediately respond to a request for comment on the report early on Wednesday.

Among other chip makers, Advanced Micro Devices was up 0.4% and Broadcom was climbing 0.6% in premarket trading.

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