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Elon Musk’s xAI Boosts Nvidia Stocks

Nvidia (NVDA) stock has reached a new all-time high, trading above $1,100 for the first time ever on Tuesday. The stock closed the day above $1,140, surpassing its previous record closing high.

The milestone moment comes after Elon Musk’s artificial intelligence startup xAI announced that it raised $6 billion in a Series B funding round on Sunday. This news sent Nvidia stock up as much as 8% in the following trading day.

The flurry of AI investment has continued to boost optimism over Nvidia’s growth rate as the chipmaker continues its record-setting stock rally. Last week, Nvidia reported first quarter results that exceeded Wall Street’s expectations, with adjusted earnings surging 461% year over year and revenue growing by 262%.

According to the Information, Musk plans to use Nvidia chips for a new “supercomputer” that will be used to power xAI’s chatbot named Grok. “xAI will continue on this steep trajectory of progress over the coming months, with multiple exciting technology updates and products soon to be announced,” Sunday’s blog post read.

In addition to stellar earnings, Nvidia also announced a 10-for-1 stock split and an increase to its cash dividend — a move that’s been echoed by other tech giants in recent quarters.

In an exclusive interview with Yahoo Finance following the company’s earnings report, Nvidia CEO Jensen Huang expressed confidence in the company’s future, shrugging off concerns about a potential demand slowdown. Huang stated that the company’s Q1 data center growth continued to be fuelled “by strong and accelerating demand for generative AI training.”

“People want to deploy these data centers right now,” Huang said. “They want to put our [graphics processing units] to work right now and start making money and start saving money. And so that demand is just so strong.”

The company reported record quarterly Data Center revenue of $22.6 billion, up 427% from the year-ago period. In total, Data Center revenue accounted for 86% of the company’s total revenue for the quarter.

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