Nvidia stock climbed again on Thursday after racking up gains the day before on Google parent Alphabet’s artificial intelligence spending plans.
Shares of the chip maker closed 3.1% at $128.68. The S&P 500 increased 0.4%.
The stock climbed 5.2% on Wednesday after Alphabet pledged to make $75 billion in capital expenditures this year. That came after Microsoft and Meta Platforms also said they intend to raise their capex to build AI infrastructure.
It was a much-needed boost. Nvidia stock has started this year in the red because of fears that the rapid rise of Chinese start-up DeepSeek’s cheaper AI model could push big technology companies to rethink their capital expenditure plans.
Big Tech has accelerated the launch of new AI models in response to DeepSeek’s advances.
Google said Wednesday it would offer a new “Flash-Lite” version of its Gemini AI, which would be its most cost-efficient version so far. ChatGPT’s developer, OpenAI, made a similar claim about its new o3-mini model last week.
“The launch of OpenAI’s o3-mini demonstrates how much of an overreaction the market had for DeepSeek’s perceived innovations and highlights that this race to AGI [artificial general intelligence] is far from over, as evidenced by the higher capex guides from Meta and Google,” wrote Jefferies equity sales specialist William Beavington.
Separately, DeepSeek could face the same fate as TikTok. Lawmakers were planning to introduce a bill Thursday that would block the app from government-owned devices, The Wall Street Journal reported.
Meanwhile, Morgan Stanley said in a note Thursday that it sees the recent selloff, triggered by concerns over competition from DeepSeek, as a buying opportunity and reiterated its stance that Nvidia remains its "Top Pick."
The investment bank acknowledges that DeepSeek has created "some headwinds around export controls and longer-term investment," but Morgan Stanley remains confident in Nvidia’s ability to navigate these challenges.