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Advances in AI are driving demand for chips from Nvidia and others
Nvidia’s market value has reached $2 trillion (£1.58 trillion), another milestone that puts the chipmaker on track to join the ranks of the world’s most valuable companies.
The Silicon Valley company’s stock rose more than 4% in Friday morning trading, but has since fallen slightly.
The gains widened following the company’s blockbuster earnings announcement this week.
The company is benefiting from advances in artificial intelligence (AI), which are driving demand for its chips.
The company’s sales more than doubled last year to more than $60 billion, and boss Jensen Huang told investors this week that demand was “soaring” around the world.
image source, Getty Images
Nvidia President Jensen Huang told investors that demand for chips is surging.
In less than a year, the company reached a value of $1 trillion, and now ranks as the fourth most valuable publicly traded company in the world, behind Microsoft, Apple, and Saudi Aramco.
The company’s market value ended the day at just under $2 trillion, after the stock retreated from early Friday highs.
Founded in 1993, Nvidia was originally known for making computer chips, especially the type that processes graphics for computer games.
Long before the AI revolution, the company started adding features to its chips that it said would help with machine learning, and those investments have helped it gain market share.
The company is now considered an important company to watch for how quickly AI-powered technologies are permeating the business world.
The company’s stock price has more than tripled in the past 12 months, rising from less than $240 a share to nearly $800 in intraday trading on Friday.
On Thursday, the day after the earnings report, buyers snapped up the stock, pushing its value by $277 billion, the biggest single-day gain in Wall Street history.
The report also helped fuel the broader market rally, convincing investors that the AI boom is “living up to the hype,” as Hargreaves Lansdown’s Deren Nathan puts it. It seems like he let it happen.
“In automotive, it’s used for design, in communications, it’s used for network planning, and in mainstream enterprises, it’s used to understand data and gain insights that weren’t available before,” Bob O’Donnell. says Mr. A US-based technology analyst told the BBC earlier this week:
“This is now really starting to impact all kinds of companies, not just specialized technology companies, and this is a real tipping point for the industry.”
