Nvidia, the dominant player in the artificial intelligence (AI) chip market, has surged to a market value of $2 trillion, making it the third most valuable company in the U.S.
The stock jumped 15% Thursday (Feb. 22) to a record high of $780.85, adding about $260 billion to its market capitalization, Reuters reported Thursday.
This rally has also lifted other companies in the chip sector and led to record highs in various stock indices around the world, according to the report.
The demand for Nvidia’s chips has been soaring, with the company forecasting 233% growth in first-quarter revenue, exceeding market expectations, the report said.
This growth has been fueled by the robust demand for its graphic processing units from datacenters undergoing AI upgrades, per the report. Russ Mould, investment director at AJ Bell, compared Nvidia’s role in the tech revolution to that of the providers of tools during the gold rush in the mid-1800s.
While the company’s revenue growth has been impressive, there are concerns about U.S. curbs on chip sales to China impacting its revenue, according to the report.
Despite this, at least 17 brokerages have raised their price targets for Nvidia, with one predicting that the company could reach a $3 trillion market capitalization in the next 12 months, the report said. Short sellers who bet against Nvidia have rushed to exit their positions, incurring significant losses.
Nvidia is at the center of a generative AI revolution that quite literally cannot run without its products, PYMNTS reported Wednesday (Feb. 21).
“We have the speed, scale and reach to help every company in every industry become an AI company,” Jensen Huang, founder and CEO of Nvidia, said Wednesday during the company’s quarterly earnings call. “The year ahead will bring major new product cycles with exceptional innovations to help propel our industry forward.”
It was reported Feb. 11 that OpenAI CEO Sam Altman is pitching a multitrillion-dollar project that would increase the planet’s chip-building capabilities and AI powering abilities.
The scarcity of the expensive AI chips upon which OpenAI and other AI companies rely has been a concern for the companies. Nvidia currently dominates the chip market with a global market share of greater than 80%.
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