Nvidia’s valuation has temporarily exceeded $1 trillion, thanks to the high demand for generative artificial intelligence tools. The rising valuation is attributed to the recent presentations by Google and Microsoft at their respective events where AI tools constituted the vast bulk of their discussions. Nvidia’s chips have made it a key supplier for companies trying to build AI-based products.
The company’s valuation surpassed the $1 trillion benchmark as trading opened at just over $405 per share. This puts Nvidia in the same league as Apple and Microsoft, who had surpassed the significant mark in August 2018 and August 2019, respectively. Amazon and Google are the other tech stocks in the club, and Meta is a former member. This milestone was, however, short-lived as the share price fell back to $401.11 by the end of the trading day, taking the company’s stock value to just under $1 trillion.
In the last quarterly earnings report, Nvidia noted over $2 billion in profit in three months. This latest push comes after Nvidia’s business boomed early in the pandemic during a GPU shortage while they were in demand for PC gaming and cryptocurrency mining before those markets fell back throughout 2022. Last fall, CEO Jensen Huang admitted to building too many gaming GPUs and was forced to sell them for less money. However, the outlook was more promising by the time of Nvidia’s next report in February, with ChatGPT all over the news, as Huang hyped the potential of Nvidia’s data center growth, and the most recent report showed a new record in data center revenue.
Over the weekend, Nvidia’s Computex 2023 keynote was full of AI announcements, including a demo of games using its Avatar Cloud Engine (ACE) for Games to support natural language both for input and responses and a new DGX GH200 supercomputer built around its latest Grace Hopper Superchip that’s collectively capable of an exaflop of AI performance. Reuters reported Nvidia’s shares jumped around 25 percent last week, and premarket trading Tuesday morning had the stock hitting up to $404.91, a gain of about 4 percent, as reported by Bloomberg.
Nvidia’s valuation has been on the rise, thanks to the increasing demand for AI-based products. The company’s chips have made it a key supplier for companies trying to build something with AI. Although its valuation briefly exceeded $1 trillion, the share price fell back to $401.11 by the end of the trading day. Nvidia’s recent Computex 2023 keynote was full of AI announcements, which further cemented its position as a leader in the AI industry.