In the morning trading session on May 30 (US time), Nvidia's stock increased by 4.2%, officially bringing the AI and gaming chip maker's capitalization to over $1,000 billion. TSMC is the second largest chip maker with a market value of about $535 billion.
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| Nvidia officially becomes the first chip company with a trillion-dollar capitalization |
Other US companies in the trillion-dollar club include Apple, Alphabet, Microsoft and Amazon. Wall Street has been ramping up its price targets on Nvidia following a wildly optimistic forecast. Some analysts have put Nvidia on par with Google’s parent company at $1.6 trillion.
That said, AI is the key to Nvidia’s historic milestone after the company stunned investors with a revenue forecast that beat analysts’ expectations by 50%. Nvidia forecasts $11 billion in revenue in the second quarter of 2024 alone. Thomas Hayes, chairman of Great Hill Capital, called Nvidia “the perfect example of AI right now.”
In particular, Nvidia's graphics chips (GPUs) play a very important role in generative AI platforms such as ChatGPT and Google Bard. Nvidia is famous for its products such as discrete graphics cards, but until recently, many people still thought that GPUs were only for heavy gaming.
The advent of “coin mining” as well as AI technology has changed people’s thinking. Some GPU manufacturers and suppliers such as Nvidia, AMD, TSMC have recorded a sharp increase in stock prices in the past few months.
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