This Is Why Nvidia Stock Is Surging This Week

Mizuho analysts reported on Wednesday that Nvidia shares saw a 5% increase, adding $13 billion to the company’s market capitalization, which they attribute to an unexpected factor.

This surge followed news that CEO Jensen Huang had completed his stock selling plan, which he had initiated earlier this year. Mizuho pointed out that despite the sharp rise in Nvidia’s stock price, there was no significant news regarding demand, profit margins, or the much-anticipated Blackwell chips that could have influenced this increase.

The firm noted that insider selling typically isn’t a concern for institutional investors. They observed that retail investors and quant traders likely seized on this narrative as a buying opportunity, propelling Nvidia’s stock higher. Mizuho remarked that it doesn’t take much to generate excitement around Nvidia.

The analysts also addressed broader concerns among investors regarding Nvidia’s long-term growth, particularly related to capital expenditures in artificial intelligence (AI). Many buy-side investors are questioning whether investments in AI by 2026 will be adequate to exceed the projected 21% revenue growth for that year.

However, Mizuho referenced a recent report from Bain Consulting, which indicates that the market for AI-related products could expand nearly to $1 trillion by 2027, with AI services and hardware poised for annual growth rates of 40-55%. This outlook may alleviate investor concerns surrounding the sustainability of AI spending beyond 2025.

In conclusion, Mizuho believes Nvidia is well-positioned for long-term growth, especially with the positive sentiment surrounding investments in AI, as major companies continue to increase their spending on data center infrastructure for AI development.