Nvidia stock (NVDA) rose more than 2% on Wednesday after an industry report projected "unprecedented" levels of investments in artificial intelligence, a bullish sign for the AI chipmaker.
Consulting firm Bain's annual technology report published on Wednesday projects that companies will need to make "unprecedented levels of investment" in technology infrastructure to stay on top of the artificial intelligence boom.
“If large data centers currently cost between $1 billion and $4 billion, costs for data centers five years from now could be between $10 billion and $25 billion,” the report said.
The firm's research also states data center operators and hardware suppliers will enjoy a short-term windfall as companies and governments splurge on computing capacity.
"Nvidia, for example, projected $10 billion in revenue from governments’ sovereign AI investments in 2024, up from zero last year," the report said.
Over the past few months, Wall Street has been searching for clues about how long massive infrastructure spending will last and what the return on investments for AI chip buyers will look like.
On Wednesday, Nvidia stock extended prior session gains after CEO Jensen Huang appeared to have finished selling shares for the time being.
Over the past few months, Huang cashed in on roughly $713 million worth of shares as part of a plan to sell 6 million shares by March 2025 — a goal he reached earlier than expected.
Despite his stock sale, Huang continues to hold his position as the company's biggest shareholder.
Nvidia shares are up roughly 20% since Sept. 6. The stock has gained more than 150% year to date.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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Correction: A previous version of this article contained an incorrect spelling of Jensen Huang's name. We regret the error.