Nvidia Worth Over $1tn As AI Booms
Nvidia's shares have gone up a lot, and now it's worth $1tn. This makes it the first chipmaker ever to reach this value. People are predicting that there will be a big demand for Nvidia's products because of the rise of artificial intelligence.
On Tuesday morning, the gaming and AI chip company's shares went up by 4.2%. They achieved a significant milestone.
On Thursday, the company's value jumped by 25% to $940bn. This came after they predicted revenues of $11bn for July, which was a lot higher than the predicted $7.2bn.
Nvidia's prediction got praised by Wall Street experts. They said the forecast was "unfathomable" and "cosmological". Consequently, many analysts raised their target prices.
Many businesses are trying to showcase AI integration. Some experts think there might be too much hype around AI. Additionally, chip companies are facing issues due to trade restrictions between the US and China.
The demand for AI has helped Nvidia. They make hardware that can handle big models with many inputs.
Nvidia had trouble in 2022. Demand for their graphics chips slowed down. They wanted to buy Arm from SoftBank. Arm is a UK chip designer. But regulators didn't let them buy the company.
During this year, the company's stock price has doubled due to optimistic beliefs on generative AI. Generative AI needs big data centers filled with semiconductor chips.
Nvidia is now part of the $1tn dollar club in the US, along with companies such as Apple, Amazon, Microsoft, and Alphabet. Meta, which owns Facebook, Instagram, and WhatsApp, also reached the milestone in 2021 but has since fallen back. Meta is currently valued at about $670bn as of the last close.
Thomas Hayes, chair of Great Hill Capital, says Nvidia is a top AI company. The market is figuring out if AI is really a trend.
ChatGPT from OpenAI is doing well, and this is making other tech companies like Alphabet and Microsoft interested in generative AI. Generative AI is a type of AI that can talk like humans and create jokes and poetry.
