Nvidia Shares Hit Two-Year Highs After Unveiling Chip Deals With Alibaba, Baidu and Didi

Nvidia hits a two-year high Wednesday after unveiling three key chip deals with some of China's biggest tech giants.
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Nvidia  (NVDA) - Get Report shares jumped Wednesday after the chipmaker unveiled a series of deals with some of Asia's biggest tech companies as it continues to expand its offering beyond its video gaming roots..

Nvidia said Didi Chuxing, China's massive ride-sharing rival to Uber Technologies  (UBER) - Get Report, will use its GPUs and AI technology to build out its autonomous driving and cloud computing divisions. At the same time, Nvidia also said online retailer Alibaba Group Holding  (BABA) - Get Report and search engine giant Baidu Inc.  (BIDU) - Get Report are using its AT technology for shopping recommendations and customer click increases. Nvidia drew around a fifth of its $12.9 billion in 2018 revenues from its China business. 

“Developing safe autonomous vehicles requires end-to-end AI, in the cloud and in the car,” said Nvidia's Rishi Dhall. “Nvidia AI will enable DiDi to develop safer, more efficient transportation systems and deliver a broad range of cloud services.”

Nvidia shares were rising 1.43% Wednesday to $231.52, the highest since October 2018 and a move that extends the stock's year-to-date gain to more than 73%.

Analysts at Jefferies noted on Monday that Nvidia has created "a moat with its platform and ecosystem" and expects the chipmaker to "remain the dominant beneficiary from AI proliferation" over the near-term.

Earlier this month, Nvidia CFO Colette Kress noted at a Barclays investment conference that it would likely take "a little bit more than a year" before Nvidia sees volume shipments for autonomous driving solutions that go into production cars.

"[Long] term, when you think about other types of revenue streams, we absolutely have that possibility from a software perspective to think about different ways to overall monetize and continue to add value throughout the overall product life," Kress said, adding that Nvidia's GPUs will help power the data center infrastructures needed by automakers to do things such as simulate autonomous driving activity.