Nvidia Stock Is Rising. Why Wall Street’s Banking on a Fresh Rally.

Nvidia chips are the favored choice for training artificial-intelligence models. (David Paul Morris/Bloomberg)

Nvidia stock was edging up early in Wednesday trading after a pullback from its record high. Wall Street is backing the chip maker’s rally to resume.

Nvidia shares were up 0.7% at $154.40 in early trading.

The stock fell 3% on Tuesday amid a wider pullback in technology companies, breaking a six-day winning streak that had seen it hit a record closing high of $157.99.

Among other chip makers, shares of Advanced Micro Devices was down 0.1%, and Broadcom stock was rising 0.3%.

The demand for Nvidia’s hardware still looks strong, with the launch of its current Blackwell artificial-intelligence processors to be followed by the next generation Rubin chip platform in 2026.

Mizuho analyst Vijay Rakesh estimated that strong initial sales of Rubin next year could lead to 14% growth in Nvidia’s AI chip shipments in a research note this week. Rakesh forecasts Nvidia will ship 5.3 million AI accelerators this year, climbing to 6.0 million in 2026.

The Vera Rubin AI server, scheduled for the second half of 2026, is set to be 3.3 times faster than this year’s top-end Blackwell Ultra server according to Nvidia. It is designed to be liquid cooled, but Mizuho’s Rakesh thinks an air-cooled option would drive more sales.

“Nvidia could roll out an air-cooled version of Rubin as many traditional data centers are still built to support air-cooled architectures, which expands its TAM [total addressable market]. We continue to see AMD as a key second source for GPUs, but share is expected to remain small,” Rakesh wrote.

Rakesh has an Outperform rating on Nvidia stock and $170 target price. He has an Outperform rating on AMD stock and $135 price target.

Nvidia’s hardware will be costly. A fully equipped rack-scale Blackwell system, incorporating 72 graphics-processing units, is estimated to cost around $3.8 million. However, analysts are confident cloud-computing providers such as Oracle and CoreWeave will continue to spend big on the newest systems in answer to growing demand.

“We believe overall AI adoption will continue to rise, driving further monetization for software and internet companies,” wrote Mark Haefele, chief investment officer at UBS Global Wealth Management, in a research note on Wednesday. “Oracle, for example, has recently signed a single cloud deal worth $30 billion in annual revenue, more than the current size of its entire cloud infrastructure business.”

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