Nvidia shares climbed Wednesday, inching closer to a record high as the artificial intelligence chipmaker extended a rally that has added roughly $1 trillion in market value since April. The stock rose nearly 1% in premarket trading, targeting its record closing price of $149.43 set in January.
The advance follows a 2.6% jump Tuesday that brought shares to $147.90, their highest level since the January peak. Loop Capital fueled Wednesday's gains by raising its 12-month price target to $250 from $175, citing expectations that AI compute markets could justify a $6 trillion market capitalization for the company.
Loop Capital analysts argue that hyperscale cloud spending and "AI factory" investments could reach $2 trillion by 2028, driven by generative AI deployments1. The upgrade reflects growing conviction in AI demand alongside optimism around Nvidia's new gaming GPU launch and supply-chain improvements1.
The company announced the RTX 5050 graphics card Wednesday, priced at $249 and featuring a 60% performance improvement over its predecessor1. The gaming segment strengthening comes as Nvidia targets upgrade cycles from legacy users1.
Nvidia's stock has surged 45% since hitting lows in April, when concerns about export controls and trade tensions weighed on shares1. The rally has brought the stock to 10.1% higher for the year, erasing steep declines that occurred earlier in 20252.
The chipmaker faced headwinds after President Trump imposed a ban on sales of H20 chips to China, resulting in a $2.5 billion revenue loss in the first quarter and an anticipated $8 billion loss in the second quarter34. Shares also dropped in January when Chinese startup DeepSeek launched a low-cost AI model that raised questions about demand for Nvidia's processors34.
Recent policy changes have improved the outlook. The Commerce Department eliminated the Biden administration's AI diffusion rule in mid-May, removing restrictions on which countries Nvidia can sell AI chips to1. A U.S.-China trade agreement also reduced tariffs from 145% to 30% for the U.S. and from 125% to 10% for China for 90 days2.
Since reporting first-quarter earnings on May 28 that exceeded Wall Street projections, Nvidia shares have gained over 9%, significantly outpacing the S&P 500's 3.5% rise during the same period34. CEO Jensen Huang has emphasized that the company's 90% market share in data center GPUs positions it to benefit from rising AI infrastructure spending5.