• Nvidia shares closed at a record high, rising 2.6%.
  • The rally is fueled by robust demand for AI chips, particularly in data centers.
  • Nvidia's data center revenue hit $30.8 billion in the latest quarter, driving overall revenue to $35 billion.

Nvidia Corp. shares surged to an all-time high on Tuesday, climbing 2.6% to close at $135.58, as investors continued to pile into the AI chipmaker amid unrelenting demand for its graphics processing units used in artificial intelligence training and inference. The record close extends a blistering rally that has seen Nvidia’s market value more than double over the past year, cementing its position as the world’s most valuable semiconductor company.

The latest leg higher comes after Nvidia reported blockbuster quarterly results earlier this month, with revenue soaring to $35 billion, up 122% from a year earlier. The data center segment, which includes its H100 and upcoming Blackwell GPUs, contributed $30.8 billion, accounting for the bulk of sales. The results underscored that enterprises and cloud providers are still aggressively spending on AI infrastructure, despite concerns about a potential slowdown.

“Nvidia continues to be the primary beneficiary of the AI arms race,” said Hans Mosesmann, an analyst at Rosenblatt Securities. “Their execution has been flawless, and the pipeline for next-generation products like Blackwell remains incredibly strong.”

Nvidia has also been expanding its software ecosystem, with its CUDA platform and AI Enterprise suite gaining traction among developers and corporate customers. This helps lock in users and provides a recurring revenue stream, further solidifying its competitive moat against rivals like Advanced Micro Devices Inc. and Intel Corp.

Partnerships with cloud giants such as Amazon Web Services (AMZN), Microsoft Azure (MSFT), and Google Cloud (GOOGL) continue to drive demand for Nvidia’s hardware, as these companies build out massive GPU clusters for internal AI workloads and customer-facing services. Meanwhile, sovereign AI initiatives in countries like Japan, India, and France are adding another layer of demand.

Still, some investors are wary of valuation. Nvidia trades at over 40 times forward earnings, a premium that reflects lofty growth expectations. Any signs of easing demand or supply chain hiccups could trigger a sharp pullback. The company also faces headwinds from U.S. export restrictions on advanced chips to China, though it has managed to develop compliant products for that market.

In its earnings call, Nvidia’s chief financial officer, Colette Kress, said demand is “exceeding supply” and that the company is working to ramp up production. CEO Jensen Huang, known for his trademark leather jacket, emphasized that the AI revolution is still in its early stages, pointing to breakthroughs in generative AI, autonomous vehicles, and industrial robotics.

We reached out to Nvidia for additional comment but did not immediately receive a response.

Correction: A previous version of this article misstated the day of the record close. It was Tuesday, not Monday.