Nvidia’s stock price increased by 24% in a single day, making it one of the most significant rises for a U.S. stock. The increase is due to Nvidia’s excellent revenue prediction, which highlights AI’s underutilized potential.
This spike nearly quadrupled the stock’s value for the year and lifted Nvidia’s market capitalization to roughly $939 billion. As a result, Nvidia is now larger than Taiwan’s TSMC and ranks behind trillion-dollar firms in the United States such as Apple, Alphabet, Microsoft, and Amazon.
The earnings announcement from Nvidia prompted a rally in the semiconductor industry and AI-focused firms, resulting in stock market gains in Japan and Europe. Except for Amazon, major US technology stocks enjoyed increases ranging from 0.6% to 3.8%, with Advanced Micro Devices Inc closing 11% higher.
Analysts promptly boosted their price forecasts for Nvidia following its impressive performance. Currently, 27 analysts say Nvidia is the main player in the market for processors that support AI services such as ChatGPT, hence pushing AI developments. As a result, the average price goal this year has more than quadrupled, with Elazar Advisors giving a high objective of $644.80, valuing Nvidia at $1.59 trillion, close to Alphabet.
Nvidia’s CEO, Jensen Huang, revealed that the company expects a surge in demand for AI chips, estimating that over $1 trillion worth of current data center equipment will need to be replaced with AI chips. This anticipation arises as generative AI is being integrated into various products and services, highlighting the widespread applications of AI technology.
The sources for this piece include an article in Reuters.