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Why Nvidia Stock Rose Today

By Joe Tenebruso – Aug 25, 2021 at 6:11PM

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A new supercomputer deal bodes well for the tech titan's data center business.

What happened

Shares of Nvidia (NVDA 2.84%) climbed 2% on Wednesday after the semiconductor giant announced an agreement with the U.S. Department of Energy.  

So what

Nvidia's accelerated computing platform will power a supercomputer built by Hewlett Packard Enterprise at the Argonne National Laboratory. The Polaris supercomputer will be capable of completing high-performance and data-intensive artificial intelligence (AI) computing workloads.

"Polaris is a powerful platform that will allow our users to enter the era of exascale AI," Argonne Director Michael Papka said in a press release. Exascale computing systems can perform at least one quintillion calculations per second. 

A computer chip that is labeled AI.

Image source: Getty Images.

The supercomputer will be used in vital scientific research areas, such as clean energy and cancer treatments. "The era of exascale AI will enable scientific breakthroughs with massive scale to bring incredible benefits for society," Nvidia executive Ian Buck said.

Now what

Advanced technologies designed for supercomputers are often eventually made available for commercial use cases. This supercomputer deal is thus a positive sign for Nvidia's data center business, which is already seeing increased adoption of its accelerated computing and AI capabilities as more organizations shift their operations to the cloud.

Nvidia's data center sales are already growing at a rapid clip. Revenue in this segment surged 35% year over year to $2.37 billion in the second quarter. 

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Nvidia. The Motley Fool has a disclosure policy.

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