Nvidia (NVDA) shares surged 12% over five trading sessions, closing at $219.22 on August 5—the highest level in two months—after a series of bullish catalysts reinforced demand for the company's AI chips. The rally pushed the stock above a descending channel that had been in place since May, signaling improved momentum.
AI Spending and Sovereign Demand
Robust capital expenditure plans from Microsoft, Amazon, Alphabet, and Meta were key drivers. Each reported above-forecast spending and committed to expanding data centers, AI systems, and cloud infrastructure, fueling expectations of sustained GPU orders. Nvidia's 2026 AI chip capacity is reported to be almost fully booked, with analysts at Bank of America and Goldman Sachs maintaining price targets between $250 and $300.
Counterpoint Research data showed that 92% of sovereign AI models—those backed by national governments—have been trained on Nvidia hardware. Sovereign AI revenue more than tripled year over year to over $30 billion in fiscal 2026, underscoring the company's dominance in state-level AI infrastructure.
SpaceX Endorsement
Elon Musk announced during SpaceX's first earnings call on August 4 that the company will exclusively use Nvidia hardware for its future AI computing infrastructure. The endorsement added a new layer of demand visibility and further emboldened investors.
Earnings Setup and Technical Levels
Nvidia reports fiscal second-quarter results on August 26. Analysts expect revenue near $91.8 billion, nearly double the year-ago figure. Susquehanna analyst Christopher Jacobson noted a historical pattern of Nvidia rallying in the two to three weeks before earnings, a trend seen across the last eight quarters. The stock remains below its record near $236, and a sustained move above that level could be tested if buying persists. However, a pullback to the $200–$210 range is possible, with the 50-day moving average at $205.31 acting as support.
Institutional ownership is 65.27%, and the company has an $80 billion buyback program along with a recently raised quarterly dividend of $0.25 per share.
