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Why NVIDIA Stock Surged on Tuesday

By Daniel Sparks - Mar 24, 2020 at 5:16PM

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The tech company's shares soared as investors turned bullish on the broader market.

What happened

Shares of graphics processing unit (GPU) specialist and artificial intelligence company NVIDIA (NVDA 5.55%) surged on Tuesday. The stock closed the trading day up 17.1%.

While the stock's gain was undoubtedly helped by a sharp rise in the overall market, some optimistic analyst notes about the tech company helped, too.

A chart showing a stock price moving higher

Image source: Getty Images.

So what

Highlighting the market's optimism on Tuesday, the S&P 500 rose 9.4% and the Dow Jones Industrial Average jumped more than 11%. Investors were encouraged by President Trump's remarks about aiming to reopen businesses soon.

"I would love to have the country opened up and rarin' to go by Easter," the president said in a Fox News interview on Tuesday. 

Also on Tuesday, Wedbush analyst Matt Bryson added NVIDIA to the firm's Best Ideas List, noting that it is well positioned to deal with the coronavirus impact on the economy. In addition, Needham analyst Rajvindra Gill upgraded the stock from hold to buy, saying that the company has a superior balance sheet and healthy free cash flow.

Now what

While there's no guarantee that Trump's prediction that Americans will return to work by Easter will play out as expected, it's an encouraging narrative for investors. The longer the economy is shut down, the greater the chances are that many businesses and consumers will be hurt.

Of course, the U.S. will need to make progress on slowing the spread of the coronavirus in order for Americans to actually return to work by Easter.

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