Shares of Nvidia moved higher in early trading Wednesday, with investors appearing to look past a fresh competitive move from Arm Holdings into the artificial-intelligence processor market.
The stock was up about 3% in early trading, even as Arm surged more than 15% after unveiling its first internally developed AI chip.
Arm’s entry expands competition
Arm, which has historically licensed chip designs, announced its AGI CPU on Tuesday, marking its first foray into manufacturing its own semiconductors.
The company said major technology firms, including Meta and OpenAI, will be among the initial customers.
The company also outlined aggressive financial targets, projecting that its CPU business could generate around $15 billion in annual revenue by 2031 as part of a broader $25 billion revenue goal.
Despite the headline move, analysts suggested the competitive threat to Nvidia remains limited in the near term.
“[Arm’s] message was not that it is trying to replace GPUs or attack the accelerator value pool directly,” Benchmark Research analyst Cody Acree wrote in a note.
He added that Arm’s strategy is more focused on embedding itself deeper into the architecture layer that supports AI infrastructure rather than competing head-on with accelerators.
Nvidia continues to dominate the market for graphics-processing units (GPUs), which remain the backbone of AI training and inference workloads and the company’s primary revenue driver.
Arm’s CPU push targets a different layer of computing, suggesting that while competition in AI infrastructure is broadening, Nvidia’s core position in accelerators remains largely intact for now.
Expanding AI footprint in energy sector
Separately, oilfield services firm SLB will expand its partnership with the chipmaker to develop artificial intelligence infrastructure and models tailored for the energy industry.
Under the expanded agreement, SLB will serve as a design partner for modular AI data centres built on Nvidia technology and collaborate on developing an “AI Factory for Energy.”
The platform aims to help energy companies process large volumes of operational data more efficiently.
“Building AI Factory infrastructure and domain models is needed to turn massive amounts of energy data into actionable insights and accelerate more efficient and sustainable energy systems.”
Long-term growth narrative remains strong
Nvidia’s long-term growth outlook continues to draw strong conviction from leadership.
A $10 trillion valuation for Nvidia came up during a recent conversation between Chief Executive Jensen Huang and podcaster Lex Fridman, as part of a broader discussion on the expanding role of computing in the global economy.
Huang downplayed the figure as illustrative rather than a target, but reiterated his confidence in the company’s trajectory, saying, “I think that Nvidia’s growth is extremely likely and in my mind, inevitable.”
The company recently reported quarterly revenue of $68.1 billion, up 73% from the prior year, driven largely by $62.3 billion in data-centre sales.
At current levels, Nvidia’s market capitalisation stands at roughly $4.4 trillion.
A hypothetical $10 trillion valuation—referenced in the discussion—would imply significant additional upside, though such projections remain long-term and contingent on sustained demand for AI infrastructure.
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