Nvidia's capitalization hits $2 trillion

Shares of US chipmaker Nvidia soared in early trading on February 23, at one point bringing its capitalization to $2 trillion for the first time.

Nvidia opened the weekend trading session with a 4.9% increase to a record $823.9, helping its market capitalization reach $2 trillion. However, the increase narrowed to just 0.4% at the close. The company's market capitalization is now $1.97 trillion.

Nvidia is benefiting greatly from the global demand for AI chips. The company now controls 80% of the high-end AI chip market.

The company is on track to hit a $1 trillion market cap in May 2023. Earlier this month, it surpassed Alphabet to become the third-most valuable company in the U.S. Nvidia shares rose 16% on Feb. 22, adding $277 billion to its market cap — the most in U.S. stock history.

According to Reuters , the time it took Nvidia to go from a market capitalization of $1,000 billion to $2,000 billion was just 8 months - the shortest in Wall Street history and half the time of tech giants like Apple and Microsoft. These are the two rare companies in the world with a market capitalization of over $2,000 billion.

Nvidia shares have surged in recent sessions after the company released its financial report for the quarter ending in late January 2024. Accordingly, revenue more than tripled compared to the same period last year, to more than $22 billion. Profit increased eightfold, to $12.3 billion.

Nvidia shares have risen nearly 60% since the start of the year, and the company’s market capitalization tripled last year. Nvidia’s gains this year have been a big contributor to the S&P 500’s performance.

“For AI companies right now, the question is not whether there is demand, but what they will do to meet the soaring demand,” said Ipek Ozkardeskaya, an analyst at Swissquote Bank.

“Cloud companies are planning to ramp up their spending to meet the world’s AI needs, and it looks like almost all of that spending will go to Nvidia,” said Brian Colello, an equity strategist at Morningstar, who forecasts Nvidia’s revenue will increase by several billion dollars per quarter through fiscal 2025.

Ha Thu (according to Reuters, CNN)

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