In a historic moment for the semiconductor industry, Nvidia Corp is on the verge of breaching a $1 trillion market capitalization, becoming the first US chipmaker to join this elite club.
As of Tuesday, the company’s shares were seen surging 3.5% at $402.91 in premarket trading, setting the stage for the unprecedented valuation milestone. With this achievement, Nvidia joins the ranks of tech juggernauts like Meta, Apple Inc, Alphabet Inc, Microsoft Corp, and Amazon.com Inc, who all previously crossed the trillion-dollar market capitalization threshold.
The leap in Nvidia’s value comes in the wake of a surprising revenue forecast last week that exceeded analysts’ predictions by an astounding 50%. Described by Wall Street experts as “unfathomable” and “cosmological”, this bullish projection has led to a sweeping increase in price targets, with the highest estimations valuing the company at a colossal $1.6 trillion, paralleling Google-parent Alphabet.
Following the announcement, Nvidia’s shares rose approximately 25% last week, triggering an industry-wide rally. This surge was particularly noticeable in AI-related stocks, and even spilled over into other chipmakers, contributing to the Philadelphia SE Semiconductor index closing on Friday at its peak in over a year.
The rapid ascendancy of OpenAI-owned ChatGPT, along with the success of generative AI in general, has become a significant driver of growth in the sector. Its ability to generate human-like conversation and create a diverse range of content, from humor to poetry, has compelled tech behemoths like Alphabet and Microsoft to invest heavily in this groundbreaking technology.
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