Nvidia (NVDA, Financial), a leading player in the AI chip market, has seen its stock prices rise in October as investor confidence grows in the demand for its new Blackwell architecture chip. Earlier, Nvidia's CEO Jensen Huang announced that Blackwell chips have entered full production, with demand described as "insane". This contributed to Nvidia's stock reaching a historic high not seen in nearly four months.
In a recent report, Morgan Stanley revealed that Nvidia's Blackwell chips are sold out for the next 12 months, indicating robust market demand and a promising outlook for the year's shipments. The report suggests that advancements like OpenAI's new o1 model are creating fresh growth opportunities for Nvidia by boosting inference computing needs.
Since early October, Nvidia's shares have seen an 11% increase, driven largely by investor optimism over the future growth of Blackwell chips, despite earlier concerns about shipment delays. Previously, rumors of design flaws had led to fears of a three-month or longer delay, but these concerns have been alleviated by Jensen Huang's statements and positive analyst feedback.
Adding to Nvidia's favorable market conditions, its key partner TSMC recently reported stronger-than-expected sales data, reflecting the strong demand for AI technologies. TSMC's September revenue surged 39.6% year-over-year, contributing further confidence in Nvidia's ongoing success.
Investor sentiment has been further bolstered by OpenAI's recent $6.6 billion funding round, suggesting that a significant portion of this capital might benefit Nvidia as demand for AI chips increases. Analysts anticipate that the Blackwell chip alone could generate $7 billion in revenue for Nvidia in Q4, with continued strong demand for older chip models.
The options market has also shown bullish signs, with investors purchasing call options to buy over 30 million shares at prices ranging from $150 to $189 by next March, representing an 11.3%-40.2% premium over Nvidia's recent closing prices.
