Nvidia closed the week with a sharp recovery as investors moved past recent concerns about the sustainability of the artificial intelligence investment cycle and semiconductor valuations. The rebound extended across the broader chip sector, with the Philadelphia Semiconductor Index gaining more than 8% over the five trading sessions, signaling renewed confidence in AI-related technology demand.

AI Trade Regains Momentum

Nvidia’s shares rose more than 10% during the week after semiconductor stocks suffered a significant setback in the previous period. Investors had questioned whether the enormous spending required to expand AI infrastructure could continue to support elevated valuations across chipmakers. The subsequent recovery suggests that market participants remain willing to assign substantial value to the industry’s growth prospects when concerns over demand and fundamentals ease.

The broader semiconductor recovery is important because Nvidia remains one of the central suppliers to the AI infrastructure build-out. The performance of the Philadelphia Semiconductor Index, which rose more than 8% for the week, indicates that the improvement was not limited to a single company but reflected a broader reassessment of the sector.

SpaceX Adds to Nvidia’s Data Center Pipeline

Nvidia also received a notable boost from developments at SpaceX. During SpaceX’s first earnings call as a public company, CEO Elon Musk said the aerospace and technology company planned to build data centers both on Earth and in space using Nvidia chips exclusively.

Musk said SpaceX would deploy Nvidia’s Vera Rubin-based NVL72 rack-scale systems for ground-based data centers and develop modified versions that could be placed into orbit. The announcement reinforces the expanding range of applications for accelerated computing and highlights the growing infrastructure requirements associated with AI development.

For Nvidia, the significance extends beyond a single customer relationship. SpaceX’s plans illustrate how demand for computing capacity is expanding across industries as companies invest in infrastructure designed to support increasingly intensive AI workloads. At the same time, the scale and timing of such projects remain important factors for investors assessing whether AI capital expenditure can maintain its current pace.

Memory Constraints Remain a Sector Risk

The positive momentum came despite continuing questions surrounding the availability of high-bandwidth memory, or HBM, a critical component in advanced AI accelerators. A report cited by Yahoo Finance said Nvidia was considering versions of its upcoming Rubin Ultra chip with less HBM amid a global memory shortage.

Rubin Ultra is expected to use 1TB of HBM, while Nvidia’s current top-end Rubin chip uses 288GB. The reported testing of configurations with 192GB and 256GB would represent a substantial reduction, although the information does not establish that Nvidia has made a final decision to change the product’s specifications. Any adjustment would have to be considered alongside performance requirements, supply availability and the economics of increasingly large AI data centers.

Looking ahead, Nvidia’s trajectory will remain closely tied to the pace of AI infrastructure investment, semiconductor demand and the availability of critical components such as HBM. Investors will also watch whether the recent sector recovery develops into sustained momentum or gives way to renewed scrutiny over valuations and capital spending. Memory supply, customer commitments and AI infrastructure spending are likely to remain among the key indicators of whether the current recovery can be maintained.