The AI chipmaker's stock soared to a record high after earnings and then continued climbing
The chipmaker powering the AI models taking the world by storm just made its own mark with a record valuation. Semiconductor firm Nvidia $NVDA became the first in the chip industry to reach a $2 trillion valuation after shares of the company increased around 3% Friday morning — driven by the boom in the AI industry.
On Thursday (Feb. 22), Nvidia stock rose 16% to a record $785, and closed at a $1.94 trillion valuation.
Last week, Nvidia beat out Amazon $AMZN and Google $GOOGL parent Alphabet to become the U.S.’s third most valuable company by market cap. But the company saw its stock fall Tuesday as investors waited for its fourth-quarter earnings. The company rebounded Wednesday after beating Wall Street’s expectations, reporting revenues of $22 billion in the fourth quarter — a 270% increase from the previous year.
“Accelerated computing and generative AI have hit the tipping point,” Nvidia founder and CEO Jensen Huang said in a statement Wednesday. “Demand is surging worldwide across companies, industries and nations.”
Ahead of the chipmaker’s earnings, analysts were reportedly worried about the company’s revenues due to some of its largest customers, including Microsoft $MSFT and Meta $META, turning inwards to develop their own AI chips. Microsoft and Meta are the largest customers of Nvidia’s $30,000 H100 chip, which powers the AI products both companies are racing to develop. Both companies spent $9 billion on the chips in 2023. Alphabet, Amazon, and Oracle $ORCL were also top spenders on Nvidia’s chips last year.
The chipmakers shares are about 40% higher than at the start of the year, and 200% higher than they were a year ago. However, some analysts remain wary of the high wave its currently riding.
“Another blockbuster quarter from Nvidia raises the question of how long its soaring performance will last,” Jacob Bourne, a senior analyst at Insider Intelligence, said. “Nvidia’s near-term market strength is durable, though not invincible.”
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