Nvidia Stock Leads Chipmakers Tuesday: What's Going On?

Several chip stocks are in the spotlight Tuesday after NVIDIA Corp NVDA shares popped on reports that Elon Musk’s xAI plans to build a supercomputer that will power its Grok AI chatbot.

What To Know: According to a weekend report from the Information citing a presentation to investors, Musk aims to build a massive supercomputer powered by Nvidia chips and get it running by the fall of 2025.

The report indicates that the supercomputer would be at least four times the size of the largest GPU clusters that currently exist. Musk’s xAI could reportedly partner with Oracle Corp ORCL for development of the supercomputer, which will incorporate Nvidia’s flagship H100 GPUs.

Earlier this year, Musk unveiled that it took around 20,000 H100 chips to train the Grok 2 model. The billionaire Tesla CEO estimated that training for the Grok 3 model would require at least 100,000 H100 chips, per Reuters.

Here’s a look at some of the biggest movers in the chips space on Tuesday:

• NVIDIA Corp NVDA

• Advanced Micro Devices Inc AMD

• Micron Technology Inc MU

• Intel Corp INTC

• Taiwan Semiconductor Manufacturing Co TSM

• Super Micro Computer Inc SMCI

Several chip stocks also got a boost from Nvidia last week after the chipmaker jumped after reporting earnings for the first quarter. Nvidia reported first-quarter revenue of $26.044 billion, beating analyst estimates of $24.646 billion. The company reported first-quarter earnings of $6.12 per share, beating estimates of $5.59 per share.

Nvidia also guided for second-quarter revenue of $28 billion, plus or minus 2%, versus estimates of $26.64 billion, announced a 10-for-1 forward stock split and increased its dividend 150% to 1 cent per share on a post-split basis.

What Else: AMD CFO Jean Hu highlighted the company's growth in servers, CPUs and GPUs at the JPMorgan Global Technology, Media and Communications conference last week.

Hu highlighted that AMD’s strategic focus on power efficiency and cost-effectiveness makes it a compelling choice for enterprises facing power and space constraints. The company noted that it currently holds a 33% share in the server CPU market. Hu also announced plans for a next-generation AI PC launch in the second half of the year.

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NVDA Price Action: Nvidia shares were up 4.75% at $1,115.50 at the time of publication, according to Benzinga Pro.

Photo: courtesy of Nvidia.