Nvidia ignites chip stock rally as forecast shows AI boom is intact

Nvidia ignited a chip-stock ​rally on Thursday with a rare long-term revenue projection ​that did what its recent quarterly beats ‌could not — ​ease investor fears that the AI boom is fading. Shares of the chipmaker jumped 6.8%, putting the chipmaker on track to add about $295.7 billion in market value and marking its ‌best single-day performance since June 1, if gains hold.

After surging more than 1,000% over three years to become the world's most valuable company, Nvidia has lagged rival chip stocks in 2026 with a gain of just 12% due to fears over Big Tech's ‌data-center spending and its own role in inflating AI valuations by backing some firms that are its customers. Efforts by ‌customers, including OpenAI, to develop in-house chips that serve as an alternative to Nvidia's costly and supply-constrained processors have added to the pressure.

To ease the concerns, Nvidia on Wednesday forecast a 70% jump in next fiscal year's revenue, an unusual move by a company that typically issues quarterly projections only. It ⁠also beat ​revenue and profit expectations ⁠for the second quarter.

The forecast confirmed the "AI build-out will continue at full speed and Nvidia will continue to put a notable part of this spending in ⁠its pockets," Ipek Ozkardeskaya, analyst at Swissquote, said. "It's impossible for investors to turn their backs on this company: it is growing fast, and it ​is incredibly profitable. This is not pricing in a dream; this is reality."

Other AI-linked chip stocks also rose ⁠in a nearly $150 billion rally, with Intel, Micron, Broadcom and U.S.-listed shares of South Korea's SK Hynix up between 1.3% and 3.5%, after technology stocks gained on the ⁠Asian ​and European bourses. Even AI cloud computing companies such as CoreWeave and Nebius, which are backed by Nvidia and increasingly seen as important to its business, rose between 2% and 4.5%.

At least 16 brokerages raised their price targets on Nvidia's ⁠stock as the results showed strong demand for its next-generation Rubin AI processors, according to LSEG data. Still, Nvidia trades at ⁠a lower multiple compared with rivals ⁠as analysts' expectations for its earnings have risen faster than the company's share price. It has a forward price-to-earnings ratio of 17.9, well below Advanced Micro Devices' 37.2 times and Intel's ‌46.2 times.