Nvidia shares approach record high as AI optimism revives investor demand

Nvidia shares climbed to an intraday record on Friday before paring gains, as investors returned to the world’s most valuable publicly listed company following a sharp two-month selloff that erased more than $1 trillion from its market value, Bloomberg News reported.

The stock rose as much as 3% during the session, touching an intraday high for the first time since May, before closing 1.3% higher. While the shares finished just below their previous record, the latest advance extends a powerful rebound from a late-July low, with Nvidia now up about 23% from that level.

The recovery reflects renewed investor optimism over the outlook for artificial intelligence and the demand for the semiconductors that power increasingly sophisticated AI systems. Expectations that AI agents, including Meta Platforms’ Muse, could generate additional demand for computing capacity have helped support Nvidia’s shares in recent weeks.

The company also received a boost after announcing on Monday that it would expand its share-buyback programme by a record $150 billion. The move comes as investors reassess Nvidia’s growth prospects following months of rapidly changing sentiment around AI spending and the enormous sums being committed to infrastructure.

Nvidia’s AI bet faces growing scrutiny

The rebound follows a period of heightened concerns about whether spending on AI infrastructure can generate sufficient returns. Investors have also become increasingly focused on the potential safety risks associated with increasingly autonomous AI systems.

Nvidia sought to address some of those concerns on Monday by unveiling a new double-layered AI security system designed to prevent AI agents from behaving unpredictably or going beyond their intended functions.

According to Nvidia, the new security architecture would have prevented a recent breach of Hugging Face involving OpenAI models, highlighting the growing importance of safeguards as AI systems become more capable and autonomous.

The development adds another dimension to Nvidia’s role in the AI ecosystem. The company is not only supplying the chips and computing technology needed to build AI systems but is also increasingly addressing the security challenges emerging alongside their adoption.

Despite the recent volatility, Nvidia shares have gained around 25% so far this year, putting the company on track for a fourth consecutive year of double-digit returns.

Nvidia’s market capitalisation now stands at approximately $5.6 trillion, leaving it less than $400 billion short of the $6 trillion milestone. The latest rally therefore puts the chipmaker closer to an unprecedented valuation threshold, even as investors continue to weigh the durability of AI spending, infrastructure demand and the risks surrounding increasingly autonomous AI technologies.