Nvidia Corp. shares are surging for a third day as Elon Musk fueled the artificial-intelligence frenzy by accelerating his challenge of OpenAI, extending a post-earnings rally that’s added some US$470 billion to the chipmaker’s market capitalization. 

Nvidia stock rose on Tuesday after Musk’s artificial-intelligence startup, xAI, raised six billion from investors. The Information reported that Musk aims to connect groups of Nvidia’s H100 graphics processing units to construct an xAI supercomputer.

Nvidia’s three-day rally has now reached 20 per cent after its blockbuster earnings report impressed investors. The chipmaker said last week that its second-quarter revenue will be about $28 billion, topping analysts’ expectations and signaling to traders that the runaway surge in stocks linked to AI computing isn’t slowing down yet. 

Shares rose 7.1 per cent on Tuesday. The stock, with a market capitalization of about $2.8 trillion, closed at a record high. 

The xAI news gives “further confidence” that AI chip spending will hold up, Cantor Fitzgerald analyst analyst CJ Muse said in an interview. Nvidia’s earnings report “completely defused any notion of an air pocket” in demand for the company’s chips in 2024, he said. 

Nvidia has made swings of over $100 billion commonplace this year, with Tuesday’s surge being at least the seventh since the beginning of 2024 and the stock’s eighth ever.