GPU powerhouse Nvidia briefly joins elite $1 trillion valuation club, after its share price continued to rise amid AI boom
GPU powerhouse Nvidia surpassed $1 trillion (£810bn) in market capitalisation as its stock surged amid the ongoing AI boom.
However its time among this elite trillion dollar club was shortlived, as its share price declined soon after. The surge in its stock price had been driven by investor frenzy around generative artificial intelligence tools such as ChatGPT – which have been trained on large numbers of Nvidia chips.
Nvidia is seen by investors as a key player in the AI field. Earlier this week Nvidia said it is building a supercomputer specialised for generative AI tasks in Israel that will be one of the world’s fastest high-performance systems.
Called Israel-1, the system has been developed over the past 18 months at a cost of hundreds of millions of dollars and is to be deployed at Nvidia’s Israel data centre.
The firm’s position in the AI field helped drive a rise in its share price.
It was expected that Nvidia would breach the $1 trillion market valuation, which it achieved on Tuesday.
Nvidia’s chips are critical to the booming AI economy and the firm last week reported first-quarter revenues that dramatically exceeded analysts’ expectations, as well as revenue for the second quarter that was 50 percent more than analysts had predicted, reflecting an annual growth rate of 64 percent.
Since the launch of OpenAI’s ChatGPT on 30 November 2022, Nvidia’s market value has ballooned from roughly $420 billion to its current level.
Indeed, Nvidia’s share price has risen roughly 200 percent since October, far outpacing any other companies on Nasdaq etc.
On Tuesday Nvidia’s share price closed 3 percent higher at $401.11, just down from the $1 trillion valuation mark after hitting that level in intraday trading.
On Wednesday morning Nvidia is valued at $990,7 billion, with its share price dropping 6 percent to $395.11 in pre market trading.
Trillion dollar club
Just four other US companies currently have breached the $1 trillion club.
Apple became the first publicly listed US company worth $1 trillion (£770bn) back in August 2018.
Then in August 2020, as the Coronavirus pandemic was engulfing the world, Apple breached the $2 trillion valuation.
In January 2022 Apple became the first company ever to reach the $3 trillion market capitalisation milestone, after its shares hit a record high of $182.88.
Apple is currently valued at $2.79 trillion