Nvidia's stock movement on January 29th was influenced by Microsoft's announcement regarding its capital expenditure plans. Microsoft revealed expectations for increased spending to support growth in cloud and AI, which positively impacted Nvidia shares. The tech giant's commitment to investing heavily in AI infrastructure, despite the recent market disruptions caused by the emergence of China's DeepSeek, suggests a continued demand for Nvidia's high-performance GPUs. Analysts believe that Microsoft's substantial capex plans, including $80 billion for AI-enabled data centers, will bolster Nvidia's position as a key supplier in the AI and cloud computing sectors.
The market's reaction to Microsoft's announcement highlights the strategic importance of Nvidia's products in the evolving AI landscape. While DeepSeek's cost-efficient AI models have raised questions about the future profitability of traditional chipmakers, Microsoft's reaffirmed investment plans indicate confidence in the ongoing need for advanced GPU technology. This development has provided a boost to Nvidia's stock, as investors anticipate sustained demand for its cutting-edge chips in the face of growing AI applications.
Nvidia's stock closed at $123.70, down 4.1% from the previous close of $128.99, but gained 2.74% in after-hours trading, reaching $127.09.