On Tuesday, the Silicon Valley chipmaker Nvidia saw its market valuation surpass $1 trillion for the first time in its history, riding the wave of Wall Street’s preoccupation with artificial intelligence to new heights.
MAIN CONTEXT
Investors’ expectations for Nvidia skyrocketed this year, causing the stock price to rise by more than 10% after each earnings release. Last week, the company, which creates the chips that enable generative AI computing along with other software and hardware solutions, announced that it expects profits to double from the previous quarter due to sales of AI-related items. Apple, Amazon, Microsoft, Meta, and Tesla are all up 25% or more in 2023, and their big year-to-date rallies are leading the good return for other mega-cap technology firms.
WISE WORD
According to a note from Cowen analyst Matthew Ramsay sent out to clients on Thursday, “a paradigm shift now translating into material early revenue for the leader in AI compute,” Nvidia, thanks to its generative AI.
VALUATION
Jensen Huang, cofounder, and CEO of Nvidia, has an estimated net worth of $36 billion, making him the 34th richest person on the planet. Two months ago, Huang was the 76th richest person in the world with a net worth of $21.1 billion.
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WHAT TO LOOK FOR
Since last October, when Nvidia was worth about $850 billion less than its sister tech titan, the gap between their respective market caps has shrunk to only $250 billion. Nvidia’s market valuation is estimated to be $1.5 trillion, according to a price objective set by Rosenblatt analyst Hans Mosesmann in a note to investors last week. That’s more than Amazon’s but lower than Alphabet’s total.
FAQs
Market capitalization is the total value of all of a company’s outstanding shares. It is calculated by multiplying the number of shares outstanding by the current share price.
Nvidia’s market capitalization reaching $1 trillion is a major milestone for the company. It is a recognition of the company’s strong financial performance, its leading position in the semiconductor industry, and the growing demand for AI and data center chips. The company is now one of the most valuable companies in the world, and it is well-positioned for continued growth in the years to come.
