What's Going On With Nvidia Stock Wednesday?

Nvidia Corp NVDA stock is trading higher Wednesday amid reports of the artificial intelligence kingpin taking significant strides in securing High Bandwidth Memory (HBM) by making substantial advance payments to SK Hynix and Micron Technology, Inc MU, totaling billions. 

The move aims to ensure a stable supply of HBM3e for forthcoming GPU products scheduled for 2024, indicating Nvidia's proactive strategy in a highly competitive market, Digitimes reports.

This substantial prepayment, a rare move in the industry, serves Nvidia's goal of navigating the HBM market's escalating demand. 

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Doing so secures supply and assists memory suppliers like SK Hynix and Samsung Electronics Co SSNLF, aiding their financial stability after a challenging year.

HBM, though in high demand, presents suppliers with significant investment challenges due to technological evolution. Enhancing Through-Silicon Via (TSV) processes to lower costs and improve yields remains a critical hurdle. Nvidia's considerable upfront investment could relieve these financial burdens and encourage HBM-related technological development.

While Samsung completed product testing for HBM3 and HBM3e and signed an HBM supply contract with Nvidia, analysts highlighted differences. Samsung's use of 1a nanometer technology might require additional processes for performance enhancement, potentially increasing costs compared to SK Hynix's 1b nanometer technology utilized in Nvidia's testing.

Nvidia's strategic investments and partnerships with key suppliers illustrate its forward-thinking approach to securing vital resources and technology for future GPU products, anticipating the ever-evolving demands of the HBM market.

Nvidia stock has gained over 244% year-to-date versus SPDR S&P 500 SPY's 25%.

Price Action: NVDA shares traded higher by 0.47% at $495.10 on the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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