Why Nvidia Stock Surged Today

Nvidia (NASDAQ: NVDA) stock posted significant gains in Wednesday's trading following bullish artificial intelligence (AI) news. The company's share price closed out the day up 4.4% amid the backdrop of a 0.6% gain for the S&P 500 index and a 1.2% increase for the Nasdaq Composite index.

Nvidia gained ground today following the announcement of Stargate -- a new joint company formed by OpenAI, Oracle, and Softbank. The three partners have announced they will soon be investing $100 billion in U.S. AI infrastructure -- and the development bodes well for Nvidia.

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Nvidia stock climbs as Trump and tech leaders debut Stargate

At the White House yesterday, President Trump hosted OpenAI CEO Sam Altman, Oracle chairman Larry Ellison, and Softbank CEO Masayoshi Son to announce Stargate's AI infrastructure initiative. The joint venture is focused on expanding AI-focused data centers domestically. This project will kick of with an initial $100 billion investment and could see as much as $500 billion in investments over the next four years.

If there's one company that's poised to see the largest immediate benefits from Stargate's infrastructure spending, it's probably Nvidia. The hardware leader's graphics processing units (GPUs) are the preferred hardware for training and running advanced AI applications, and there's a good chance it will see significant sales wins connected to Stargate projects.

What comes next for Nvidia?

Thanks to its dominant position in GPUs for AI, Nvidia is positioned to be one of the biggest winners from ramping AI infrastructure spending. The company has already been posting fantastic sales and earnings growth in conjunction with the rise of AI, and recent indications suggest that customers still have plenty of appetite for processors they can use to bolster their positions in the data center.

Earlier this month, Microsoft announced that it planned to spend approximately $80 billion on AI data center infrastructure this year. Microsoft is Nvidia's largest customer, and its spending guidelines signaled a strong performance outlook for the GPU leader. Now that OpenAI, Oracle, and Softbank have formed Stargate, Nvidia could soon have the benefit of another massive customer entering the AI data center space.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft, Nvidia, and Oracle. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.