Nvidia’s Astonishing Surge Puts It on the Verge of Joining Wall Street’s Exclusive Trillion-Dollar Club. In a remarkable turn of events, the chipmaker witnessed a staggering 27% surge in its shares on Thursday, propelling its market value to nearly $1 trillion, reaching approximately $974 billion according to FactSet. This meteoric rise represents a significant jump from its previous market value of $755 billion at the close of trading on Wednesday.
Nvidia is poised to join the exclusive league of publicly traded U.S. companies valued at $1 trillion, making it the fifth member to achieve this milestone. Apple established this prestigious club back in 2018, while Microsoft, Alphabet, and Amazon have since joined the ranks of the trillion-dollar titans.
In a recent note, Needham analyst Rajvindra Gill expressed, “In late 2021, we started sharing our predictions that Nvidia would emerge as the inaugural trillion-dollar market cap semiconductor company.” Gill further stated, “Although there were fluctuations along the way, we firmly believe that Nvidia is well-positioned to attain this valuation in due course.”
Nvidia has captured the attention of investors and industry observers with its recent projection of $11 billion in sales for the second quarter of fiscal year 2024. The company attributes this optimistic outlook to the high demand for its graphics processors, which play a crucial role in powering artificial intelligence applications utilized by tech giants such as Google, Microsoft, and OpenAI, the creators of ChatGPT. This remarkable forecast has surpassed Wall Street expectations, transforming the previously AI-driven stock hype into tangible and impressive results.
Gill also emphasized that customers are actively pursuing the adoption of large language models (LLMs) and generative AI, driving a surge in demand across various essential domains. According to Gill, the challenges faced by the company in the past have largely been overcome, and they anticipate that Nvidia is now fulfilling genuine, AI-driven demand in the near future.
Nvidia had already experienced an impressive 108% increase in its shares for the year prior to Thursday’s trading session. However, the company’s astounding sales guidance, surpassing analyst expectations by over 50% with a projection of revenue, has propelled its market capitalization forward in a remarkably short span of time.
Vivek Arya from Bank of America commented that Nvidia’s upward revision in its outlook for the current quarter is the most substantial the firm has witnessed in its coverage. Arya further stated that the company’s market capitalization is heading towards “1 trillion and beyond.” On Thursday, Arya, along with several other analysts, increased their price targets for Nvidia’s stock, with one analyst predicting a potential upside of up to 64% from its closing price on Wednesday.