Nvidia hits $1T in market value on booming ChatGPT, AI demand
Nvidia, the gaming and AI chip maker, has become the first chipmaker to join the trillion-dollar club, as the company makes a strategic bet on the surge in demand for its AI chips, powering chatbot sensation ChatGPT and other technologies. The sudden rise in shares last week has pushed Nvidia’s valuation past its peers, prompting analysts to raise their price targets on the stock. The highest price target values the company at about $1.6tn, on par with Google-parent Alphabet. Despite the sky-high valuation, analysts believe Nvidia’s AI chips business has room for growth, as the generative AI technology is still at a nascent stage with wide adoption expected in the years to come.
What is Nvidia?
Nvidia is a gaming and AI chip maker.
Why did Nvidia’s shares rise sharply last week?
Nvidia’s shares rose sharply last week after the company revealed its revenue forecast surpassed estimates by more than 50%.
Why is Nvidia’s valuation significant?
Nvidia became the first chipmaker to join the trillion-dollar club, which is notable given the company’s bet on the surge in demand for its AI chips.
What is generative AI?
Generative AI is the technology that can engage in human-like conversation and craft everything from jokes to poetry. It is at a nascent stage currently.
Who are Nvidia’s peers?
The next largest chipmaker globally is Taiwan Semiconductor Manufacturing valued at about $535bn.
Surging ChatGPT and AI Demand Boosts Nvidia’s Market Value to $1 Trillion
Nvidia, a gaming and AI chip maker, has become the first chipmaker to join the trillion-dollar club after its shares surged by up to 7.7% to a record high of $419.38 in early trading on Tuesday. This surge in shares that powered the company past the trillion-dollar milestone followed last week’s revenue forecast that surpassed estimates by more than 50%, a feat that Wall Street analysts called “unfathomable” and “cosmological.” Despite its sky-high valuation, analysts believe Nvidia’s AI chips business still has room for growth, as generative AI technology is at a nascent stage with wide adoption expected. As a result of the surge, analysts have raised their price targets on the stock, with the highest price target valuing the company at about $1.6tn, on par with Google-parent Alphabet. Nvidia joins an elite group of companies, including Apple, Alphabet, Microsoft and Amazon, that have a market value exceeding $1tn.