Nvidia added a record $277 billion in value after the major chipmaker’s quarterly report beat expectations and reignited a bull market fueled by optimism about artificial intelligence. This is the largest single-day increase in market capitalization in history.
Shares of the Santa Clara, California-based maker of advanced semiconductors, which are essential for training AI language models such as ChatGPT, rose more than 16% to close at $785.38.
Nvidia’s stock price rally led the market, with the Dow Jones Industrial Average rising 1.2% (456.74 points) and the S&P 500 index gaining 2.1% to close at a record high of 5,087.03.
The tech-heavy Nasdaq index had the biggest rise, rising 3% to close at 16,041.62.
Since the beginning of this year, NVIDIA’s market capitalization has increased more than 40% to $1.96 trillion, putting it well ahead of tech giants Amazon, Alphabet, and Meta.
Only Microsoft ($3.06 trillion), Apple ($2.85 trillion) and Saudi oil giant Aramco ($2.07 trillion) closed Thursday with higher valuations.
“The people who made the most money in the gold rush of the mid-1800s weren’t the people who were looking for precious metals, they were the people who provided the tools to get the job done,” said Russ Mold, investment director at AJ Bell. Ta.
“NVIDIA is playing virtually the same role in this technology revolution today.”
Nvidia, which controls about 80% of the high-end AI chip market, reported that fourth-quarter revenue more than tripled from a year earlier to $22.1 billion.
The company said it expects sales to reach the $24 billion level in the first quarter of this year, far exceeding Wall Street expectations.
Nvidia CEO Jensen Huang told analysts on Wednesday that “we basically have great conditions for continued growth” beyond 2025.
Some analysts were concerned that U.S. curbs on semiconductor sales to China were hurting sales growth.
Sales in China accounted for approximately 9% of Nvidia’s fourth-quarter sales, down from 22% in the previous quarter.
Still, many investors are concerned about Nvidia’s rapid growth.
“We’ve far exceeded expectations and have a lot in store for the next three years,” said Paul Nolte, senior wealth advisor and market strategist at Murphy & Sylvest.
Short sellers who bet on Nvidia’s stock to fall rushed to close those trades on Thursday, said Ihor Dusaniowski, managing director of predictive analytics at S3 Partners.
Dusaniwski said short sellers have lost more than $2 billion on paper, bringing their losses so far this year to more than $6.8 billion.
At least 17 securities companies raised their price targets following the results. Rosenblatt Securities was the most bullish, raising its price target from $1,100 to $1,400, suggesting a market value of $3.5 trillion.
UBS lowered its price target to $800 from $850, reflecting “the possibility that earnings growth will slow slightly.”
with wire
