Nvidia joins the $1 trillion club, powered by AI,

New York

Growing demand for its AI chips has given Nvidia ( NVDA ) a prime spot in one of Wall Street’s most exclusive clubs: The chipmaker hit a market value of $1 trillion on Tuesday.

It is only the ninth company globally to achieve such a feat, and only five other companies worldwide currently hold the distinction: Apple ( AAPL ), Microsoft ( MSFT ), Alphabet ( GOOG ), Amazon ( AMZN ), and Saudi Aramco.

Nvidia surprised Wall Street last week when it reported gangbusters earnings and an extremely strong revenue forecast for the year ahead. Largely fueled by the recent boom in AI, the report pushed up the stock price and secured its position as one of the largest publicly traded companies in the world.

Nvidia makes chips that power generative AI, a type of artificial intelligence that can create new content, such as text and images, in response to user prompts. It’s the kind of AI that underlies ChatGPT, Google’s Bard, Dall-E, and many of the other emerging AI technologies.

Last quarter, the company’s profit rose 26% to $2 billion, and sales rose 19% to $7.2 billion, each beating Wall Street analysts’ forecasts. Nvidia’s outlook for the current quarter was also significantly – about 50% – higher than analysts’ predictions.

The stock has risen around 180% so far this year.

“Nvidia provided impressively robust guidance that will be heard around the world and demonstrates the historic demand for AI happening now in the enterprise and consumer landscape,” said Dan Ives, analyst at Wedbush Securities. “For any investor calling this an AI bubble (crypto, metaverse, now AI bubble thesis) we would refer them to this Nvidia quarter and in particular guidance that cements our bullish thesis around AI and speaks to the Fourth Industrial Revolution now standing out the door with AI.”

Nvidia shares need to stay above $404.86 to retain their $1 trillion market cap. The stock is currently trading at $408.50.

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