Nvidia Stocks Surge, Boosting Semiconductor Sector
Chipmaker Nvidia Benefited from Microsoft’s $80 Billion AI Data Center Investment Plan in 2025.
Nvidia’s stocks surged on Monday, boosting chip manufacturers following Microsoft’s announcement to invest $80 billion in AI-enabled data centers by 2025. This news fueled optimism that semiconductor demand would continue to rise.
Nvidia’s shares climbed 4.6% to $151.13 after closing a remarkable 2024 with a nearly 190% gain and a $3.7 trillion market capitalization.
Micron was the biggest winner among semiconductor stocks, rising 12%, followed by Taiwan Semiconductor Manufacturing (+5.8%), Applied Materials (+5.3%), and KLA Corp (+5.2%).
The Philadelphia Semiconductor Index rose 3.4%, reaching its highest level since mid-October.
Citigroup noted that Microsoft’s spending plan, although in line with analysts’ expectations, was a “modestly positive” update, removing the risk of a capital expenditure decline.
AI data centers are hungry for chips, that’s why people are rushing into the chip sector right now.
Foxconn’s record-breaking revenues in the fourth quarter, driven by strong AI server demand, also contributed to the overall enthusiasm in the chip sector.
General Market Outlook
Trump will take office on January 20, and in the meantime, investors will be closely watching the release of key economic catalysts this week, including labor data and speeches from Federal Reserve officials that could provide further clarity to the market.
By sector, gains in technology and communications stand out, while within the Dow Jones, Nvidia, Boeing (up 1.49%), and Microsoft led the way. Boeing’s shares rose after a brokerage upgraded its recommendation.
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