Nvidia stock edges higher amid semiconductor sector rally and AI boom

Nvidia shares rose surged in trading on Friday, tracking gains across the broader semiconductor sector following upbeat earnings from Intel and continued optimism surrounding artificial intelligence (AI) investments.

The stock gained 1.86% to $185.56 in premarket hours, while rivals Advanced Micro Devices (AMD) climbed 6.7% and Broadcom advanced 3.1%.

The sentiment across the chip sector was buoyed by Intel’s strong quarterly results and its projection that semiconductor demand will outpace supply into next year, a signal of persistent strength in the global chip market.

Intel optimism and Nvidia’s strategic collaboration

Intel shares jumped 7.75% in Friday's session to its intraday high before paring most of the gains.

The company delivered an upbeat outlook, suggesting continued demand growth across data center and AI-related chips.

Nvidia, which has been a major beneficiary of the AI infrastructure boom, previously announced plans to invest $5 billion in Intel.

Under the arrangement, Intel will manufacture custom central processing units (CPUs) that Nvidia will integrate into its AI infrastructure platforms.

The partnership highlights Nvidia’s intent to diversify its supply chain while enhancing its AI systems’ computing performance.

Analysts say the collaboration reflects the increasingly interconnected nature of the semiconductor ecosystem, where major players are balancing competition with strategic cooperation to meet soaring AI demand.

AI-driven growth and rising debt concerns

The ongoing AI chip boom continues to shape Wall Street expectations.

Analysts forecast that the largest cloud-computing firms, including Microsoft, Amazon, and Alphabet, will increase their capital expenditures by roughly 63% in 2025 compared with 2024 levels.

Such aggressive spending could support Nvidia’s projected 58% revenue growth this year, though growth is expected to moderate to 36% in 2026, according to Susquehanna analyst Christopher Rolland.

However, some market observers are sounding early warnings about the growing use of debt to finance these massive AI infrastructure builds.

Bloomberg reported that major banks are preparing a $38 billion debt offering to fund data centers for Oracle, signaling a potential shift from cash-funded expansion to leveraged financing.

“While it remains the case that a vast majority of that AI buildout is being financed out of cash flows, debt issuance by major AI-related firms has begun to pick up,” said Garrett Melson, portfolio strategist at Natixis Investment Managers said in a Barrons.com report.

“As bubble fears have begun to pick up, this is one of the few yellow flags we've seen in the space.”

Executive stock sales and China headwinds

Recent filings with the US Securities and Exchange Commission (SEC) revealed significant stock sales by Nvidia’s top executives.

CEO Jensen Huang sold 225,000 shares between October 21 and 23, totaling about $40.7 million, under a prearranged trading plan.

CFO Colette Kress sold 47,640 shares for $8.6 million, also under a scheduled plan.

Meanwhile, analysts remain focused on Nvidia’s exposure to the Chinese market, where US export restrictions have limited shipments of advanced chips.

The company designed its H20 chip specifically for China to comply with regulations, but shipments have yet to begin.

“The situation remains murky,” Rolland noted, adding that the Chinese government may be discouraging orders amid heightened geopolitical tensions.

Rolland maintains a Positive rating and a $210 price target on Nvidia shares.