Nvidia enters the trillion-dollar club, AI business helps the market value soar

Over recent times, ChatGPT has ignited a global fervor, with this innovative artificial intelligence tool commanding significant attention post-launch. This feat necessitated a profusion of computational support for training its multimodal language models on a grand scale, with NVIDIA’s A100 and H100 computation cards hailed as the unsung heroes. As numerous enterprises plunge headlong into this surging tide, the burgeoning market demand for AI computational power has precipitated a steady rise in NVIDIA’s share price over the past months.

Just days ago, NVIDIA unveiled its first-quarter results for the fiscal year 2024 (ending April 30, 2023), with both its revenue and outlook for the ensuing quarter surpassing expectations. Following the financial report, NVIDIA’s share price momentarily skyrocketed nearly 30%, ultimately closing with a substantial increase of 24.37% on May 25th, Eastern Time. This represented a staggering one-day surge in market value exceeding $200 billion, the largest single-day increase in the history of U.S. stocks – equivalent to outperforming an AMD, doubling an Intel, or tripling a Micron.

Upon the opening of Eastern Time on May 30th, NVIDIA‘s share price remained robust, at one point during the session escalating over 7.5%. The company thus became the seventh publicly-traded company to breach a market value of $1 trillion, standing as the fifth largest technology stock subsequent to Apple, Microsoft, Alphabet, and Amazon. Simultaneously, it became the first chip company to surpass a market value of $1 trillion, carving out a new historical milestone.

However, NVIDIA’s share price subsequently receded slightly, closing at $401.110 per share, reflecting a 2.99% increase and a market value of $992 billion, failing to retain its trillion-dollar status. Nonetheless, this minor setback is scarcely an issue of consequence. The overwhelming majority believe that with the thriving AI business, NVIDIA’s market value will firmly consolidate its position above the $1 trillion mark, at least in the foreseeable future.

Admittedly, there are differing opinions within the market. Some assert that NVIDIA’s share price has escalated too rapidly, with the short-term increase being quite substantial. Considering NVIDIA’s actual revenue scenario and projections, these individuals deem the current level slightly elevated. Coupled with certain destabilizing factors prevalent in the macro market, they believe these elements may exert pressure on NVIDIA’s subsequent business development and revenue.