On Friday, Nvidia reached a market value of $2 trillion, benefiting from the AI trend. A significant rise in its shares had already pushed it beyond Amazon and Alphabet, making it the third-largest company in the US.
However, another impressive earnings report from Nvidia, featuring a remarkable 265% increase in sales, fueled a new surge in enthusiasm this week. It took over twenty years for the Santa Clara, California-based company to reach a $1 trillion market valuation. Less than nine months later, Nvidia soared to $2 trillion.
Shares of the company started rising on Friday at the opening of trading in New York, briefly reaching the milestone. However, they later declined, ending the day with a 0.4% increase and a valuation of approximately $1.97 trillion.
During early trading, the benchmark S&P 500 also surpassed 5,100 for the first time before retracting. Despite this, both the S&P 500 and the Dow Jones industrial average closed the week at new record highs, reflecting Wall Street’s ongoing climb to new peaks.
Nvidia plays a central role in the AI boom, with major tech players like Microsoft, OpenAI, Amazon, Meta, and Google heavily relying on its products. These companies have inked deals to buy Nvidia’s chips in large quantities as they rush to launch new AI products and features.
This surge in demand has significantly boosted Nvidia’s business, particularly in its data center revenue, which skyrocketed by over 400% in the last quarter to $18.4 billion.
Jensen Huang, the founder and CEO of Nvidia, celebrated a turning point in faster computing for generative AI as the company released its latest earnings report on Wednesday.
Nvidia’s financial success and the general interest in AI are now seen as indicators of the industry’s health. Since the beginning of the year, the company’s stock has surged by over 60%.
Anticipation for its future growth has been fueled by Nvidia’s announcement of the upcoming release of a new chip, the B100, which will be the top-tier product in its lineup. Influential figures such as OpenAI’s Sam Altman are in discussions about launching competing ventures in the AI chip sector.
Dan Ives, a technology analyst at Wedbush, stated that Huang and Nvidia have fundamentally revolutionized technology, igniting a significant shift that investors are trying to grasp. He believes that the AI Revolution is spearheaded by Nvidia, and in his opinion, we’re just at the beginning of the AI journey.
According to Ives, the industry hasn’t witnessed a transformation of this magnitude in decades. He describes AI, along with Nvidia’s pivotal role in driving its advancement, as a transformative technological trend comparable to the emergence of the internet in the mid-90s.
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