In overnight trading, Nvidia Corp.’s market capitalization (m-cap) grew by a huge $200 billion, or 24.37 percent. This was because the chipmaker predicted strong revenue growth and said it would make more AI chips to meet rising demand.
On Thursday, Nvidia’s stock jumped 28% to its all-time high of $391.50 per share, making it the fifth most valuable company on Wall Street. Its market value is now over $960 billion, which is more than any other company. At the end of trading on Thursday, Nvidia had a market capitalization of $939.29 billion, up from $755.24 billion the day before.
Nvidia reported its earnings for the April quarter and held a conference call on May 24. During the call, it said that it expected the July quarter to have especially strong quarter-on-quarter sales growth, thanks to the growing demand for AI.
“This backs up what our server team said about February to April being the worst time for inventory corrections in servers. We have been very optimistic about the long-term growth potential of data centers. However, we thought that a slowdown in cloud spending in the US might hurt the demand for data chips in the first half of this year, with a comeback starting in the second half,” Nomura said in a note.
Nomura said that Nvidia’s view for the July quarter shows that chip demand from US cloud server providers started to rise sooner than expected. In the April quarter, Nvidia’s PC gaming sales went up from the previous quarter, and the brokerage thinks that Nvidia’s very good overall sales guidance means that the July quarter will also go up from the previous quarter.
“AI’s boom is helping Nvidia move up the big tech ladder and position itself to become a stock that everyone needs to own. When people used to talk about FAANG, they meant Facebook, Apple, Amazon, Netflix, and Alphabet. Now, they talk about MATANA, which stands for Microsoft, Apple, Tesla, Alphabet, Nvidia, and Amazon. AI investments are going to enter a time of growth.
Edward Moya, a Senior Market Analyst at OANDA for the Americas, said that NVIDIA’s AI boom is helping it move up the big tech ladder and get ready to become a stock that everyone needs to own.
“People used to talk about FAANG (Facebook, Apple, Amazon, Netflix, and Alphabet), but now they talk about MATANA (Microsoft, Apple, Tesla, Alphabet, Nvidia, and Amazon). “Investment in AI is likely to enter a time of growth,” said h.
Moya said in an article that Nvidia is about to become a trillion-dollar company because the chipmaker plans a big growth in the second half of the year.
“Big orders for data centers are a great way to start what could be an amazing 10-year run. Sales for the second quarter are expected to be $11 billion +/- 2%, which is much higher than the average estimate of $7.18 billion. “Everyone wants to put AI in the cloud, and to do that, you will need Nvidia,” he said.