A massive surge in the stock of chipmaker Nvidia has rocketed it into the ranks of the world's most valuable companies. After the company forecast that its second-quarter earnings would be $11 billion, $4 billion more than Wall Street was expecting, its stock rose 24% Thursday, boosting its value by $184 billion to $939.3 billion, well ahead of Tesla and Meta, the Washington Post reports. It's now on the verge of joining Apple, Google parent company Alphabet, Microsoft, and Amazon as a trillion-dollar company, a title only held by the four tech giants and Saudi Aramco. Nvidia's stock is now up almost 170% so far this year, putting it far ahead of other chipmakers, thanks to the boom in AI.
"When generative AI came along, it triggered a killer app for this computing platform that’s been in preparation for some time,” Nvidia CEO Jensen Huang said Wednesday. Huang founded the company with two other engineers in a meeting at a Denny's 30 years ago, where they discussed improving video game graphics, the Wall Street Journal reports. The company's graphics-processing units proved to be ideal for other uses involving complex calculations and were adopted by cryptocurrency miners. The company's stock sank as the crypto industry struggled but it rebounded with the surge of interest in AI. Its chips are used to train models like ChatGPT.
Nvidia's CFO Colette Kress told investors Wednesday that the launch of ChatGPT was the company's "iPhone moment," when the "technology came together and helped everybody realize what an amazing product it can be and what capabilities it can have," per the Post. "We're seeing incredible orders to retool the world's data centers," Huang said. Wedbush analyst Dan Ives said Nvidia is seen as the "core hearts and lungs of the AI revolution." He said before Wednesday, skeptics had been saying "an AI bubble was forming," but "instead, Jensen & Co. delivered guidance for the ages," reports Yahoo! Finance. (More Nvidia stories.)
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