Nvidia surges 26% towards $1 trillion market value as AI potential ignites investor excitement
Nvidia Corp’s stock has experienced a remarkable surge of approximately 26 percent, bringing it closer to reaching a market value of $1 trillion.The chip designer’s exceptional revenue forecast has unveiled that Wall Street has yet to fully grasp the transformative potential of artificial intelligence (AI).
Thursday’s impressive rally builds upon a year-to-date increase of over two-fold in Nvidia’s stock and is expected to add approximately $196 billion to its overall value, nearing a staggering $951 billion.
This surge positions Nvidia on track for achieving the largest single-day value gain ever recorded by a US firm.
With this market capitalization, Nvidia surpasses the size of Taiwan’s TSMC, the second-largest chip company.
In the United States, it is outranked only by trillion-dollar companies such as Apple Inc, Alphabet Inc, Microsoft Corp, and Amazon.com Inc.
The stellar earnings report has not only ignited Nvidia’s remarkable growth but has also sparked a rally in the chip sector and AI-focused firms, leading to stock market gains from Japan to Europe.
In the US, Big Tech companies, excluding Amazon, witnessed a rise between 0.7 percent and 3.5 percent, while Advanced Micro Devices Inc saw a substantial jump of 10 percent.
Driven by Nvidia’s dominant position in the market for chips powering ChatGPT and similar services, analysts swiftly raised their price targets on Nvidia stock.
A total of 27 analysts revised their views, recognizing that the company holds a commanding position in the AI landscape where numerous roads converge.
The mean price target for Nvidia stock has more than doubled this year, reflecting the growing optimism among investors.
Elazar Advisors holds the highest view with a $644.80 price target, which would value Nvidia at approximately $1.59 trillion, comparable to Alphabet’s market value.
CEO Jensen Huang emphasized the significance of AI chips, stating that around $1 trillion worth of existing data center equipment would need to be replaced as generative AI is integrated into every product and service.
These impressive results have positive implications for Big Tech companies that have increasingly focused on AI, hoping the technology will drive demand at a time when their traditional profit engines of digital advertising and cloud computing face pressure from a weak economy.
Analysts suggest that Nvidia’s stellar performance signals the potential for a generative AI boom, which could serve as the next major driver of growth in the industry.