Reasons Behind Nvidia's Stock Surge on Monday
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 22 2025
0mins
Should l Buy NVDA?
Source: Fool
Nvidia's Strategic Partnership: Nvidia has formed a strategic partnership with OpenAI, investing up to $100 billion to support the development of AI data centers, which will significantly boost Nvidia's revenue and stock value.
Impact on Nvidia's Growth: The investment will enable OpenAI to deploy data centers with 10 gigawatts of compute power, primarily utilizing Nvidia's GPU systems, further solidifying Nvidia's position as a leader in the AI semiconductor market.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 180.050
Low
200.00
Averages
264.97
High
352.00
Current: 180.050
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Position Consolidation: As the world's most valuable company with a market cap of $4.4 trillion, Nvidia maintains a strong investment appeal despite overall bearish sentiment in tech, thanks to its leadership in the AI chip sector.
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- Stock Price Volatility: Despite strong performance, Nvidia's stock price has declined following the earnings release, currently trading at a P/E ratio of 37, which drops to 23 based on expected earnings, highlighting market concerns over its high valuation.
- Market Position Consolidation: As the world's most valuable company with a market cap of $4.4 trillion, Nvidia maintains a strong investment appeal despite overall bearish sentiment in tech, thanks to its leadership in the AI chip sector.
- Cautious Investor Sentiment: Analysts suggest that investors should approach Nvidia with caution in the current market environment, as while its business remains strong, the likelihood of the stock doubling in value in the short term is low, necessitating realistic expectations.
See More
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- Core Investment: The Vanguard Total Stock Market ETF (VTI) tracks the entire U.S. stock market and owns over 3,500 stocks, providing investors with the convenience of investing in thousands of stocks with a single click, making it ideal for those looking to simplify their investments.
- Cost Advantage: With an expense ratio of just 0.03%, investing $10,000 incurs only $3 in annual fees, significantly lowering investment costs and enhancing long-term return potential for investors.
- Long-Term Return Potential: Since its inception in 2001, the ETF has averaged a 9.2% annual total return, meaning a $10,000 investment would be worth over $90,000 today, demonstrating its effectiveness as a wealth-building tool.
- Concentration Risk and Lack of Diversification: Despite holding many stocks, the ETF's performance is heavily reliant on the top 10 companies, presenting significant concentration risk, while lacking exposure to international stocks and fixed-income assets, which may hinder portfolio diversification.
See More
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- Earnings Beat: Nvidia's latest earnings report revealed record revenue for both the quarter and the year, with sustained high demand allowing the company to maintain a gross margin in the mid-70% range, reinforcing its strong leadership position in the AI chip market and enhancing its influence in the tech sector.
- Industry Impact: As the leader in AI chips, Nvidia's performance not only benefits itself but also drives demand for cloud service providers and other related products, creating a positive feedback loop that promotes growth across the entire AI industry chain.
- Investment Opportunity: With Nvidia's stock price currently down, investors have a solid entry point, especially given the strong earnings momentum, which has attracted increased attention from investors towards its stock and related ETFs.
- ETF Investment Strategy: The Dan Ives Wedbush AI Revolution ETF emerges as an ideal choice for investing in Nvidia and its partners, as it holds significant positions in companies closely linked to Nvidia, such as Taiwan Semiconductor and Amazon, thereby enhancing portfolio diversification and potential returns.
See More
US Stock Market Rises on Economic Resilience
- Strong Economic Data: The February ADP employment report revealed an addition of 63,000 jobs, surpassing expectations of 50,000, indicating continued growth in the labor market and boosting investor confidence in economic recovery.
- Service Sector Expansion: The US ISM services index unexpectedly rose to 56.1 in February, significantly better than the anticipated 53.5, reflecting the fastest pace of expansion in 3.5 years and further supporting the stock market rally.
- Oil Price Volatility: Crude oil prices surged over 1% due to the closure of the Strait of Hormuz, despite reports suggesting Iran's willingness to discuss terms for ending the conflict, intensifying market concerns over energy supply.
- Market Performance: The S&P 500 index rose by 0.78%, the Dow Jones Industrial Average increased by 0.49%, and the Nasdaq 100 index climbed by 1.51%, reflecting optimistic expectations regarding economic resilience and corporate earnings.
See More
Nvidia Reports Record Earnings Amid Surging AI Demand
- Earnings Beat: Nvidia's latest earnings report reveals record quarterly revenue driven by sustained high demand, solidifying its leadership in the global AI chip market and expected to boost growth for related companies.
- ETF Investment Opportunity: Investors can indirectly benefit from Nvidia's success through the Dan Ives Wedbush AI Revolution ETF, which includes Nvidia and major customer Amazon among its top five holdings, enhancing portfolio diversification and potential returns.
- Optimistic Market Outlook: Nvidia maintains a strong gross margin above 70%, indicating robust profitability, and with the upcoming release of the new Rubin chip, the company is poised for continued growth momentum.
- Industry Influence: As a bellwether for the tech sector, Nvidia's success is likely to benefit not only itself but also cloud service providers and other chip manufacturers, further driving the development of the entire AI ecosystem.
See More
Oil Market Signals Limited Impact from Iran War
- Oil Market Response: Jim Cramer noted that the oil market seems to indicate that the war with Iran will not lead to prolonged disruptions in global crude supply, despite major energy stocks like Exxon Mobil and ConocoPhillips falling 1.3% and 2.4%, respectively.
- Price Volatility: Brent crude settled flat after gaining 6.7% and 4.7% on Monday and Tuesday, while West Texas Intermediate crude only rose 0.1%, reflecting a cautious market outlook on future oil prices.
- Stock Market Rally: With expectations of oil market stability, the Dow Jones Industrial Average rose 0.5%, the S&P 500 gained 0.8%, and the Nasdaq climbed 1.3%, indicating investor optimism about the economic outlook.
- Tech Stock Performance: Cramer highlighted that Amazon and Nvidia saw stock increases of 3.9% and 1.7%, respectively, while CrowdStrike's 4% gain suggests a potential reassessment of bearish views on AI's impact on the software industry.
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