Market Analysis

Shares of Nvidia saw a significant surge on Wednesday, leading a broader rally in technology stocks after CEO Jensen Huang highlighted the company's robust demand for its artificial intelligence (AI) chips.

During a presentation at a Goldman Sachs conference in San Francisco, Huang mentioned rising tensions among Nvidia's clients as they competed for a limited supply of the company's cutting-edge AI chips, according to Bloomberg. He emphasized the strong demand for Nvidia's latest generation of AI chips, known as Blackwell, and stressed that companies must adopt "accelerated computing" to keep pace with the growing AI demand.

Nvidia Corporation (NASDAQ: NVDA) jumped 8.1% to close at $116.86 on Wednesday, marking its largest one-day gain in six weeks, although the stock experienced a slight dip in after-hours trading.

Huang also noted that generative AI remains in its early stages and predicted that the technology would expand beyond data centers.

His remarks come after Nvidia faced a sharp decline last week, following earnings guidance for the July quarter that fell short of some investors' high expectations. Despite the recent volatility, Nvidia shares have climbed approximately 150% this year.

The broader technology sector also saw a sell-off driven by Nvidia's losses last week.

Goldman Sachs recently reaffirmed its Conviction Buy rating on Nvidia, maintaining a $135 price target in a research note.

Nvidia has been at the forefront of an AI-driven surge in valuations over the past year, and the company is poised to continue benefiting from the growing adoption of generative AI technologies.

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