Nvidia builds on record high close following expanded Google partnership

Updated at 8:44 am EDT

Nvidia  (NVDA) - Get Free Report shares edged higher in pre-market trading, after a record high close on the Nasdaq last night, as investors continue to chase the earnings potential of the world's biggest AI chipmaker following an expanded partnership deal with Google  (GOOGL) - Get Free Report.

The new agreement, unveiled during a discussion between Google Cloud CEO Thomas Kurian and Nvidia CEO Jensen Huang, will make it easier for clients to run AI applications on Google Cloud using Nvidia-made chips with deeper integration between hardware and software offerings.

The expanded partnership should help power further revenue gains for Nvidia, while at the same time helping Google close the gap in leveraging AI and data technologies with Microsoft  (MSFT) - Get Free Report, over the coming months while gaining access to Nvidia DGX, a new AI supercomputer.

The DGX platform enables business customers to access AI-related technology through cloud computing providers such as Google, essentially creating a new market for AI-as-a-service to thousands of companies worldwide.

Earlier this month, Nvidia forecast current quarter revenues of around $16 billion, plus or minus 2%, a tally firmly ahead of the Wall Street consensus of around $11.5 billion that followed its blowout second quarter earnings.

“We’re at an inflection point where accelerated computing and generative AI have come together to speed innovation at an unprecedented pace,” Huang said. “Our expanded collaboration with Google Cloud will help developers accelerate their work with infrastructure, software and services that supercharge energy efficiency and reduce costs.” 

Nvidia shares were marked 0.78% higher in pre-market trading to indicate an opening bell price of $492.00 each. 

The stock closed at an all-time high of $487.84 each last night, extending its stunning year-to-date advance to around 240% and pegging its market value at just over $1.2 trillion.

"Clearly Nvidia is in the right place at the right time," said Daiwa Capital Markets analyst Louis Miscioscia, who lifted his price target on Nvidia by $60, to $535 per share, late Tuesday. 

"The combination of their high performance GPUs, their entire solution and that AI maybe for the first time in computing history, really living up to its potential," he added. "Just like the launch of the PC, the internet, the mobile phone, AI is big, but could be even bigger than these world changing phenomena."

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