Nvidia's strong upside momentum

What happened: Nvidia's (NASDAQ: NVDA) stock has surged due to its leading role in the AI chip market, with a new chip generation rollout expected to drive revenue growth. Micron Technology's (NASDAQ: MU) record earnings, driven by AI accelerator demand, further bolstered Nvidia's prospects. Nvidia's market cap now tops the Russell indexes, surpassing tech giants like Alphabet, Apple, and Microsoft.

Market impact: The AI chip market's growth has driven Nvidia's stock price up over 48% in the past year, making it one of the best-performing data center stocks. Nvidia's strong momentum has pushed its valuation higher relative to its peers, but bullish analysts argue it's still cheap. The AI arms race has also benefited Micron, with its high-bandwidth memory supply fully reserved for 2026, indicating robust demand for AI hardware.

What to watch next: Nvidia's upcoming earnings report (Aug 17) will provide insights into its data center and gaming revenue growth. Additionally, the launch of Nvidia's new chip generation (rumored for late 2023) will be a critical catalyst, as it could drive further revenue increases. Lastly, monitor Micron's earnings (Aug 31) for any updates on AI memory demand, which could indirectly impact Nvidia's outlook.