Nvidia stock looked set to climb again on Thursday, having racked up gains the previous session thanks to Google parent Alphabet’s artificial intelligence spending plans.
Shares of the chip maker rose 1.8% to $127.10 in premarket trading. Futures tracking the benchmark S&P 500 were up 0.2%.
Nvidia 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 as they rush to build AI infrastructure.
It was a much-needed boost. Nvidia stock has started 2025 in the red amid fears that the rapid rise of Chinese startup DeepSeek’s cheaper AI model could lead to big technology companies rethinking their capital expenditure plans.
Western rivals have 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.
Among other chip makers, shares in both Qualcomm and Arm Holdings were sliding on Thursday. Both companies reported better-than-expected earnings after Wednesday’s close.