Fueled by AI, Nvidia Joins the $1 Trillion Club
Nvidia (NVDA) has joined the elite group of companies with a market capitalization of $1 trillion, thanks to the surging demand for its AI chips. Only eight other companies worldwide have achieved this milestone, including Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), and Saudi Aramco.
The chipmaker’s recent earnings report and strong revenue forecast for the coming year took Wall Street by surprise and propelled its share price higher. Nvidia’s AI chips power generative AI, a technology that enables the creation of new content based on user prompts, such as text and images. This type of AI underlies popular innovations like ChatGPT, Google’s Bard, and Dall-E.
In the last quarter, Nvidia’s profit soared 26% to $2 billion, while sales increased 19% to $7.2 billion, surpassing analysts’ expectations. The company’s outlook for the current quarter also exceeded predictions by approximately 50%. As a result, its stock has risen by about 180% year-to-date.
Analysts have praised Nvidia’s robust guidance, highlighting the growing demand for AI in both enterprise and consumer landscapes. They view Nvidia’s performance as a testament to the significant role of AI in the ongoing fourth industrial revolution.
To maintain its trillion-dollar market cap, Nvidia’s stock must remain above $404.86. Presently, shares of the company are trading at $408.50.
