Nvidia Corporation has achieved a remarkable milestone by surpassing USD 1 trillion in market capitalisation, becoming the first chipmaker from the United States to enter the esteemed trillion-dollar club. This accomplishment stands as a significant landmark for the company.
Nvidia experienced a positive surge in its stock prices with a 2.99% jump, reaching USD 401.11. By accomplishing this, Nvidia now joins the ranks of prominent tech giants like Meta, Apple Inc, Alphabet Inc, Microsoft Corp, and Amazon.com Inc, all of whom have previously surpassed the trillion-dollar market capitalization.
Last week, Nvidia experienced a substantial surge in its stock prices of more than 26% following the release of quarterly earnings that surpassed both revenue and profit expectations. This positive performance not only benefited Nvidia but also had a positive impact on other chipmakers, except for Intel. Furthermore, the optimistic estimates played a role in further fuelling Nvidia’s gains.
Nvidia provided a noteworthy sales forecast of USD 11 billion solely for the second quarter of 2024. This projected sales figure exceeded consensus estimates by a remarkable 50%, surpassing the anticipated sales of USD 7.15 billion.
Nvidia’s graphics processing units (GPUs) play a crucial role in powering generative AI platforms such as OpenAI’s ChatGPT and Google’s Bard. While the company has long been a frontrunner in the discrete GPU sector, traditionally associated with standalone GPUs, there has been a prevailing perception among consumers that GPUs were primarily utilized for high-performance gaming. However, this perception has started to shift in recent times.
The emergence of cryptocurrency mining and the growth of artificial intelligence have disrupted the notion that GPUs were primarily meant for gaming, resulting in a substantial shift in perspective. As a result, manufacturers and suppliers of GPUs such as Nvidia, AMD, and TSMC have witnessed a significant surge in their stock prices over the past few months. Prior to Tuesday’s trading session, Nvidia share price had already experienced an impressive year-to-date increase of 166.5%.