Shares of AI chipmaker NVIDIA (NVDA) rose more than 2% on Wednesday after an industry report predicted that investment in artificial intelligence will reach “unprecedented” levels, a bullish sign for the company.
Consulting firm Bain’s annual technology report released Wednesday predicts that companies will need to make “unprecedented levels of investment” in technology infrastructure to gain an advantage in the artificial intelligence boom.
“Today, a large data center costs between $1 billion and $4 billion; in five years’ time, a data center could cost between $10 billion and $25 billion,” the report said.
The company’s research also noted that data center operators and hardware suppliers would enjoy short-term benefits as companies and governments invest heavily in computing power.
“For example, NVIDIA predicts that government investments in national AI will generate $10 billion in revenue in 2024, up from zero last year,” the report said.
Over the past few months, Wall Street has been searching for clues about how long the big infrastructure spending will last and what the returns on AI chip buyers might be.
Nvidia shares rose in yesterday’s trading on Wednesday after CEO Jensen Huang appeared to be done selling shares for the time being.
Hwang has sold roughly $713 million worth of shares in the past few months as part of a plan to sell 6 million shares by March 2025, a target he reached sooner than expected.
Despite selling his shares, Huang remains the company’s largest shareholder.
Nvidia shares have risen about 20% since Sept. 6 and are up more than 150% this year.
Ines Ferre is a senior business reporter at Yahoo Finance. Follow her on X at @ines_ferre.
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Correction: An earlier version of this article misspelled Jensen Huang’s name. We apologize for this error.
