Hitting a new historical high in four months! NVIDIA's stock surged over 10% this month, reigniting investors' passion for Blackwell?

The concept leader of artificial intelligence (AI) stocks, NVIDIA's stock price has been on the rise since October, reaching a new historical high on Monday for the first time in nearly four months, reflecting investors' optimism about the strong demand for NVIDIA's latest mass-produced architecture chip - the Blackwell chip.

On Monday, October 14th, during the pre-market trading session in the U.S. Eastern Time, NVIDIA's stock price, which had closed roughly flat on the previous Friday, opened up more than 1.2% and accelerated upwards. The stock price rose to over $139.6 in the pre-market session, hitting a new intraday high since June 20th, with an increase of nearly 3.6% during the day. The gain later narrowed to within 3%, still poised to set a new closing high since June 18th.

As of the closing on the previous Friday, NVIDIA had risen by 11% in the first two weeks of October and by about 172.2% year-to-date. If the upward trend continues on Monday, it will further expand the over 10% increase in October and push the year-to-date gain towards 180%, with a cumulative increase of nearly 200% over the past 12 months.

As a giant in AI chips, NVIDIA remains the darling of the U.S. stock market in the AI boom until 2024. The significant rise within this month reflects NVIDIA's successful reassurance of investors' concerns about the long-term growth prospects of the Blackwell chip.

Previously, there were reports in early September that due to design flaws, the most advanced AI chip in the Blackwell series would be delayed for three months or longer, and the mass shipment of Blackwell chips might be postponed to the first quarter of next year. Since then, the production and demand trends of Blackwell chips have attracted more attention and affected the stock market.

After the U.S. stock market closed on October 2nd, NVIDIA CEO Jensen Huang explicitly stated that the Blackwell architecture chips had been "fully put into production" and the demand for Blackwell chips was "insane." At that time, Huang's remarks eased concerns about the delayed production of Blackwell chips.

Some media outlets believe that NVIDIA's recent stock price strength is partly due to Huang's statement. Moreover, a report released by Morgan Stanley after meeting with NVIDIA management last week also brought positive news. The report revealed that the products for the next 12 months of Blackwell chips have been sold out, indicating strong market demand and suggesting a continued high growth trend in shipments throughout the year, stating that "all signs indicate that the business remains strong, with a very bright outlook."

Last week, during a closed-door meeting at an AI summit, NVIDIA's management mentioned OpenAI's first reasoning-capable model, o1, stating that with the release of the OpenAI o1 model, a new AI narrative is unfolding, and the growth in reasoning power demand is bringing new growth opportunities for NVIDIA. The aforementioned report by Morgan Stanley believes that reasoning computing will boost long-term demand for AI chips, expecting NVIDIA to perform strongly in 2025 and viewing 2026 as the early stage of a long-term investment cycleThe above comments and evaluations have reinforced investors' view that NVIDIA is still the preferred way to invest in AI, especially as major companies continue to focus on AI investment. Zehrid Osmani, portfolio manager at Martin Currie Investment Management, said, "People had questioned the impact of production delays, so these updates are reassuring."

John Belton, portfolio manager at Gabelli Funds, said that these events "have reignited people's interest in the AI field, and people are very excited about reasoning-based AI use cases. Reasoning represents a new area for NVIDIA, and given its computational intensity, this could be a huge new product category."

In addition to the optimism about the prospects of Blackwell chips, NVIDIA's key chip manufacturing partner, TSMC, recent sales figures also reflect the strong market demand for AI. Last Wednesday, TSMC's September revenue easily exceeded market expectations, reaching NT$251.87 billion, a year-on-year increase of 39.6%, and a 31.9% year-on-year increase in total sales for the first 9 months of this year. Analysts believe that "TSMC has always been at the forefront of AI development." HSBC expects that TSMC's third-quarter report to be released this Thursday will show that the enterprise continues to be at the high end of performance guidance.

Furthermore, it was pointed out by some media that the recent rise in NVIDIA's stock price began on October 2nd. On that day, OpenAI announced the completion of a new round of financing of $6.6 billion, with a valuation of $157 billion, and reportedly NVIDIA also participated. A large portion of the financing obtained by OpenAI is expected to "flow back" to NVIDIA, as OpenAI's energy needs continue to grow, requiring more AI chips to be deployed.

The media mentioned that last Monday, some Wall Street analysts reiterated their buy ratings on NVIDIA's stock. KeyBanc's report predicts that the new Blackwell chip alone will bring NVIDIA $7 billion in revenue in the fourth quarter of this year, and the demand for old chips is "still very strong." Wedbush analysts believe that AI startups may see a new round of financing, which will also increase NVIDIA's revenue.

There have also been signs of optimism about NVIDIA's prospects in the options market recently. Last Thursday, NVIDIA saw a wave of call option buying, with option holders able to purchase over 30 million shares of NVIDIA at prices ranging from $150 to $189 by March next year. This buying price range is 11.3% to 40.2% higher than NVIDIA's closing price last Friday