Nvidia ends week up more than 10% as AI chip fears ease

Nvidia (NVDA) closed out the week on a hot streak, climbing more than 10% as concerns over the broader AI trade seemed to subside for the time being.

The Philadelphia Semiconductor Index (^SOX) also rose for the week, rising more than 8% over the last five trading days.

Semis took a bruising in the prior week over fears about the ongoing AI build-out and whether the companies’ lofty valuations were supported by their fundamentals, but they recovered as traders turned more positive on the sector.

Nvidia also got a boost from SpaceX (SPCX) when Elon Musk announced during the company’s first earnings call on Tuesday that the rocket firm would build data centers both on Earth and in space exclusively using Nvidia’s chips.

Musk said he would pack data centers on the ground using Nvidia’s Vera Rubin-based NVL72 rackscale system and launch modified versions of the rack into orbit around Earth.

Nvidia’s positive week comes despite a report from The Information on Thursday that the company is considering reducing the amount of high-bandwidth memory (HBM) in its upcoming Rubin Ultra chip due to the global memory shortage.

Rubin Ultra is expected to use 1TB, which is equal to 1,000GB, of HBM, but according to the report, Nvidia is testing versions with 192GB and 256GB of HBM. Nvidia’s current top-of-the-line Rubin chip uses 288GB of HBM.