What Happened?
Shares of leading designer of graphics chips Nvidia (NASDAQ: NVDA) jumped 2.6% in the morning session after the company announced a $2 billion investment in chip-design software maker Synopsys as part of an expanded partnership to accelerate AI-driven engineering. The investment gave Nvidia a 2.6% stake in Synopsys. The collaboration aimed to integrate Nvidia's computing platforms and artificial intelligence tools directly into Synopsys's software. This combination was expected to make the process of designing complex chips smarter and faster across various industries. By embedding its technology throughout the chip creation process, Nvidia sought to enhance its key role in the AI market. The move was part of a broader effort to use its technology to speed up engineering and design workflows.
After the initial pop the shares cooled down to $181.87, up 1.1% from previous close.
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What Is The Market Telling Us
Nvidia’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 12 days ago when the stock gained 2.1% on the news that the company reported third-quarter results that beat Wall Street expectations and provided a strong revenue forecast for the upcoming quarter, amid "off the charts" demand for its next-generation GPUs. The chipmaker announced quarterly revenue of $57.01 billion, a 62.5% increase from the same period last year, exceeding analysts' forecasts. The company's adjusted earnings per share of $1.30 also topped estimates and represented a jump of over 60% year-over-year. Looking ahead, Nvidia issued an optimistic forecast, expecting revenue of about $65 billion for the fourth quarter, which was also ahead of expectations. CFO Colette Kress emphasized that the company is "still in the early innings" of platform shifts toward accelerated computing and AI, adding that customer demand continues to outpace supply. These strong results appeared to ease investor concerns about a potential slowdown in spending on artificial intelligence technology.
Nvidia is up 31.5% since the beginning of the year, but at $181.87 per share, it is still trading 12.2% below its 52-week high of $207.04 from October 2025. Investors who bought $1,000 worth of Nvidia’s shares 5 years ago would now be looking at an investment worth $13,427.
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