Nvidia has started a new week with a strong upward trend.

This Monday, the US stock market is closed for two days on Memorial Day. By Tuesday (May 28th), when the US stock market opened, Nvidia's stock price opened high and closed at $1,139.01, up nearly 7%.

On the surface of the news, the recent rise in Nvidia's stock price is related to Musk's AI company.

xAI announced on Sunday that it raised $6 billion in its latest round of venture capital. This funding has raised the valuation of this one year old startup to $24 billion. xAI stated that the funds raised will be used to bring the company's first batch of products to market, build advanced infrastructure, and accelerate research and development.

It is reported that, xAI is collaborating with Oracle, a cloud computing company, to access its data centers and computing chips. Oracle recently signed a new cloud computing infrastructure agreement with Nvidia and stated plans to increase capital expenditures in the next fiscal year.

In addition, according to media reports, Musk stated in a report to investors that, xAI is planning to build a supercomputer to power its next-generation artificial intelligence chatbot Grok, and may collaborate with Oracle to create an interconnected cluster composed of Nvidia chips, which is at least four times the size of the largest similar product currently available. The report mentioned that Musk hopes to put this supercomputer into operation before the fall of 2025.

As soon as this news came out, Nvidia's stock price rose in response.

For Nvidia, to maintain its astonishing growth rate, AI competition needs to continue, and xAI financing is a positive signal for the industry. More importantly, in collaboration with Amazon and Google's parent company Alphabet Meta is different from Microsoft, xAI has not yet mentioned that it is preparing to develop internal chips, which means that a lot of the newly raised funds should be used to purchase Nvidia chips.

Frederick Havemeyer, an analyst at Macquarie, said that the budget for artificial intelligence training may increase tenfold every one to two years. In a research report on Tuesday, Havemeyer wrote, "We believe that the investment cycle in artificial intelligence is still in its early stages. Once popularized, new inference infrastructure will be built on a scale similar to all data centers worldwide."

This also means that Nvidia's market demand is far from reaching its peak.

It is worth noting that after Tuesday's close, Nvidia's total market value rose to $2.8 trillion, second only to Microsoft ($3.2 trillion) and Apple ($2.91 trillion). Among them, the market value gap between Nvidia and Apple is only $110 billion, the smallest in 15 years.

Since the beginning of this year, Nvidia has undoubtedly performed the best in the Mag-7 of the US stock market. After leading the S&P 500 index with a 238.9% increase in 2023, Nvidia's stock price has risen by 136% as of May 28, 2024. By contrast, since 2024, the S&P 500 index has risen by 11%, while the Nasdaq Composite has risen by 13%.

Meta stocks ranked second with a 35.6% increase, which is still a considerable distance from Nvidia's increase. Microsoft rose 14.4% in 2024, although the increase was not very high, its stock price is at a historical high, and its total market value still dominates the rest. On the Apple side, despite a strong rebound in May, its stock price has still fallen by 1.3% so far this year.

Since last year, Nvidia's stock price has been like sitting on a rocket.

On June 13th last year, Nvidia's market value just surpassed $1 trillion, and then on February 23rd this year, its market value exceeded $2 trillion. And just three months later, Nvidia's stock price broke through the $1,000 mark on May 23rd, and its market value also broke through the $2.5 trillion mark.

Now, the market is looking forward to Nvidia's stock price reaching a new milestone. Based on its current market value of $2.8 trillion, Nvidia only needs to increase by 7.2% to reach $3 trillion. This will also exceed Apple's current valuation and significantly narrow the gap with Microsoft.