On Monday, NVIDIA shares rose over 7% and gained an additional 1.8% in after-hours trading to stand at $445 per share.

 

According to analysis, the two significant drivers behind NVIDIA's most recent surge are support from Morgan Stanley and a rush by Middle Eastern magnates to procure NVIDIA graphics cards.

 

On Monday, analysts at Morgan Stanley released a report reiterating that NVIDIA remains their "top pick" from their Q2 earnings reports, offering a more optimistic forecast than anticipated. Given constraints in supply and the market's ongoing economic concerns, NVIDIA's share price plummeted over 10% this month. However, Morgan Stanley analysts forecast that NVIDIA will benefit in the long run.

 

"We think the recent selloff is a good entry point, as despite supply constraints, we still expect a meaningful beat and raise quarter-and, more importantly, strong visibility over the next 3-4 quarters," the Morgan Stanley analysts wrote. "Nvidia remains our Top Pick, with a backdrop of the massive shift in spending towards AI, and a fairly exceptional supply-demand imbalance that should persist for the next several quarters."

 

Having experienced a downturn in the market in 2022, NVIDIA's stock price exploded this year, increasing by over 200% year-to-date, outperforming a majority of tech stocks.

 

"The bottom line is that this is a very positive situation, October numbers are entirely gated by supply, and the upper end of the buy side consensus has been reined in," the analysts wrote. "We see numbers are going up at least enough that this stock will trade at P/Es more similar to the upper end of semis, with material upside still ahead."

 

On the other hand, it is reported that Saudi Arabia and the United Arab Emirates are competing to purchase thousands of NVIDIA's high-performance graphic chips, joining the global AI arms race.

 

Sources suggested that Saudi Arabia, through the public research institution King Abdullah University of Science and Technology (KAUST), has bought at least 3,000 NVIDIA H100 graphics cards, priced at $40,000 each.

 

Sources familiar with KAUST's AI labs revealed that by the end of 2023, KAUST will receive 3,000 such dedicated graphics cards, worth approximately $120 million. KAUST also possesses at least 200 NVIDIA A100 graphics cards and the university is in the process of building a supercomputer called Shaheen III, which is expected to be operational this year. This machine will run 700 NVIDIA super graphics cards named "GraceHoppers."

 

In addition, Multiple sources closely connected to the university even implied that KAUST plans to use these graphics cards to construct its own large language model, similar to OpenAI's GPT-4.

 

Meanwhile, the UAE has secured several thousand NVIDIA graphics cards and has developed its own open-source large language model called "Falcon" at the state-owned technology innovation institute in Masdar City, Abu Dhabi. As the first nation to establish a Ministry of Artificial Intelligence and launched the "Generative AI Guidelines," UAE is looking to bolster its position as a global pioneer in technology and AI with this upcoming acquisition of large loads of NVIDIA chips