Nvidia Shares Close Over $2tn For First Time

Nvidia chief executive Jensen Huang. Image credit: Nvidia

Shares of Nvidia close over $2tn for first time after Dell reports surge in demand for AI servers, amidst ongoing stock market boom

Nvidia shares closed at over $2 trillion (£1.6tn) for the first time on Friday, following a report from Dell that showed a surge in orders for artificial intelligence (AI) servers containing Nvidia chips.

A 4 percent gain saw Nvidia’s shares close at $2.06tn, putting it behind only Microsoft and Apple at the top of Wall Street valuations, at respectively $3.09tn and $2.77tn.

Google parent Alphabet has risen over $2tn at times, but has not closed above the benchmark.

Dell shares rose as high as 38 percent before closing up 32 percent, while other AI server and chip makers also saw gains.

programmer programming jobs computers ai artificial intelligence nvidia
Image credit: Unsplash

‘Tipping point’

Generative AI has surged in popularity and spurred a gold rush of investment into the AI sector over the past year, launched by the introduction of OpenAI’s ChatGPT in November 2022.

Nvidia’s stock has risen 66 percent so far in 2024 after more than tripling last year.

It overtook the value of Amazon and Alphabet in February and edged over $2tn for the first time a week ago before receding during the session.

In its most recent earnings report last month Nvidia said it had seen a 265 percent year-on-year revenue increase as chief executive Jensen Huang said AI had “hit the tipping point” with surging demand “across companies, industries and nations”.

AI frenzy

The subsequent share surge added $277bn in market capitalisation in one day, a record for a US listed company.

Analysts said the frenzy around AI has begun to invite comparisons to a bubble, but some pointed out that for certain companies, including Nvidia, spiralling stock values are based on real revenues.

Kristina Hooper, global chief markets strategist at Invesco, compared recent stock market gains to those of the 1990s, but said that at that time there was excitement over technology without cash flows to match.

“This time around, there’s sizzle — but there’s also steak,” she told the Financial Times.