Nvidia Stock Reaches Fresh Record High, Extends Rally to Third Consecutive Day

Nvidia Extends Winning Streak to Third Straight Session

Shares of chipmaking giant Nvidia continued their upward trend on Friday, 8 May, with a 3% surge to a fresh record high of $217.80. This marked the company's third consecutive day of gains, putting it on track for its biggest weekly gain since late October.

Nvidia's optimism is partly driven by its recent deal with AI cloud provider IREN Ltd. The company has agreed to invest as much as $2.1 billion in IREN as part of a broader partnership aimed at accelerating the construction of AI infrastructure. IREN has also agreed to issue Nvidia a five-year right to purchase up to 30 million shares at an exercise price of $70.

The partnership between Nvidia and IREN is expected to roll out billions of dollars' worth of computing capacity. According to a Bloomberg report, IREN will enter into a five-year agreement to provide Nvidia access to cloud services worth around $3.4 billion in revenue. The two companies plan to deploy large-scale data centers together, leveraging Nvidia's equipment and IREN's expertise in securing land, power, and other critical components.

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Nvidia's strategy of investing in companies across the AI ecosystem has drawn criticism from some observers. However, the company's market capitalisation has continued to rise, surpassing $5.2 trillion, with a gain of 15.72% so far this year. The rally has been driven by the company's dominance in the AI chip market, with demand for its products remaining robust.

The tech industry's focus on artificial intelligence has led to a surge in spending, with the four cloud-computing giants, often referred to as hyperscalers, indicating that their combined outlays on AI are unlikely to slow anytime soon. According to reports, their combined outlays are expected to surpass $700 billion this year.