Nvidia Corp. (NVDA) It surpassed $1 trillion in market capitalization on Tuesday, becoming the first chipmaker to join the exclusive club. The gaming chip company e artificial intelligence, whose shares climb 5% on Wall Street, was valued at 1 trillion dollars.
Taiwan Semiconductor Manufacturing Co Ltd is the world’s next largest chipmaker, valued at about $535 billion. Meta Platforms Inc, valued at about $670 billion at last close, had reached the $1 trillion market capitalization milestone in 2021.
Apple Inc, Alphabet Inc, Microsoft Corp and Amazon.com Inc are the other US companies that are part of the club.
Wall Street analysts called Nvidia’s forecasts “unfathomable” and “cosmological,” and raised their price targets en masse. The higher price target valued the company at about $1.6 trillion, on par with Google parent Alphabet.
“As the valuation is well above the long-term average, there will be significant pressure to deliver consistently high growth (…) there could be future share price volatilitysaid Susannah Streeter, head of money and markets at Hargreaves Lansdown.
The impetus was given by Artificial Intelligence (AI)
AI has risen to the fore after Nvidia surprised investors last week with a revenue forecast that beat analysts’ expectations by more than 50%.
“Nvidia is the gold standard for AI right now,” said Thomas Hayes, president of Great Hill Capital. “The market is looking to figure out if this AI trend is real.”
Nvidia shares jumped about 25% last week, sparking a rally in AI-related stocks and boosting other chipmakers, helping the Philadelphia SE Semiconductor Index close at its highest level on Friday. in more than a year.
The rapid success of ChatGPT, owned by OpenAI, has prompted tech giants like Alphabet and Microsoft to make the most of generative AI, which can engage in human-like conversations and craft everything from jokes to poetry.
The announcements that made the actions soar
Over the weekend, the company’s CEO, Jensen Huang, announced a series of new AI-related products ranging from robotics to video games to advertising.
It also revealed a supercomputer that will help tech companies create their own versions of ChatGPT. “It’s too much,” Huang said during the presentation in Taiwan. “I know it’s too much.”
Nvidia is the largest maker of the types of specialized chips powering a new generation of AI products, alongside rivals such as Advanced Micro Devices Inc. (AMD) and Intel Corp (INTC).
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