Nvidia, the US chipmaker, has a market capitalization of $2tn as it capitalizes on artificial intelligence boom.
The company has already surpassed Alphabet (the owner of Google, YouTube and Amazon) and Amazon to become the third-largest in America.
Another blockbuster earning report, in which Nvidia exceeded Wall Street’s expectation with a 265% increase in sales, sparked another rally this week.
Santa Clara-based Nvidia took over two decades to reach a market valuation of $1tn. Nvidia’s market value reached $2tn less than nine months after that.
The group’s shares began to climb on Friday, when New York opened its trading. This allowed it to briefly reach the milestone. Later, they faded and ended the day with a 0.4% gain, with a value of $1.97tn.
The benchmark S&P 500 cleared 5,100 during early trading before slipping. The Dow Jones Industrial Average and S&P 500 both ended the week with new record highs.
Nvidia’s chips are at the center of the AI goldrush, as those who develop the technology heavily rely on them. Microsoft, OpenAI Amazon, Meta, and Google all have deals in place to buy the chips from Nvidia at bulk prices as they rush to release new AI features and products.
The remarkable acceleration of demand has turbocharged Nvidia’s business. Its most closely-watched profit figure, revenue from data centres, grew by over 400% last quarter to $18,4bn.
Jensen Huang – the founder and CEO of the company – hailed Wednesday’s latest earnings report as a “tipping moment” in computing for generative AI.
Nvidia’s financial performance and the demand for its stock are now seen as indicators of interest in AI. The stock of this company has increased by over 60% since the beginning of the year.
Nvidia plans to release a new chip at the top of its product range, the B100 later this year, have heightened expectations about its growth trajectory. Sam Altman of OpenAI, for example, is holding discussions on rival AI chip ventures.
Dan Ives said that Huang and Nvidia have “basically cracked the code” and sparked an entire generational technology transformation. Investors are still trying to grasp this. “The AI Revolution begins with Nvidia, and our view is that the AI party and pop corn are just getting started.”
Ives said that the industry as a whole hasn’t seen a change of this magnitude in decades. He described AI, and Nvidia’s role in its development, as “a transformational tech trend” we haven’t seen since the beginning of the internet, in the mid-1990s.