Nvidia (NVDA) has secured a prestigious position on Wall Street’s elite roster thanks to the surging demand for its AI chips. On Tuesday, the chipmaker achieved a market capitalization of $1 trillion.
Nvidia (NVDA) has joined an exclusive group of companies globally by reaching a market capitalization of $1 trillion. This accomplishment places Nvidia as the ninth company worldwide to achieve this milestone, joining the ranks of Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), and Saudi Aramco. Currently, only five other companies hold this distinction.
Last week, Nvidia surprised Wall Street with exceptional earnings and an exceptionally robust revenue forecast for the upcoming year. The company’s strong performance, primarily driven by the flourishing AI industry, not only propelled its share price higher but also solidified its position as one of the largest publicly traded companies globally.
Nvidia specializes in manufacturing chips that are crucial for generative AI, which is a type of artificial intelligence capable of generating new content, such as text and images, based on user inputs. This form of AI serves as the foundation for various cutting-edge technologies, including ChatGPT, Google’s Bard, Dall-E, and numerous other innovative AI applications.
In the previous quarter, Nvidia experienced a remarkable 26% surge in profit, reaching $2 billion, while sales rose by 19% to $7.2 billion. These impressive figures not only surpassed the expectations set by Wall Street analysts but also showcased the company’s strong performance. Furthermore, Nvidia’s outlook for the current quarter exceeded predictions by a significant margin of approximately 50%.
As a result of its outstanding financial performance, Nvidia’s stock has witnessed a substantial increase of about 180% year-to-date, demonstrating significant growth and investor confidence in the company.
Dan Ives, an analyst at Wedbush Securities, expressed astonishment at Nvidia’s extraordinary guidance, which he believes will reverberate globally and highlight the current surge in AI demand across enterprise and consumer sectors. Ives refuted the notion of an AI bubble, emphasizing the significance of Nvidia’s quarter and its guidance as evidence supporting the bullish thesis on AI. According to Ives, this further solidifies the arrival of the 4th Industrial Revolution, with AI poised to revolutionize various industries.
For Nvidia to maintain its trillion-dollar market cap, the shares of the stock must stay above $404.86. As of now, the stock is trading at $408.50, comfortably above the threshold required to retain its esteemed market capitalization.
