Following an extraordinary quarterly report, Nvidia experienced an unprecedented surge in its stock market value on Thursday, marking a historic milestone on Wall Street.
The remarkable surge, totaling an astonishing $277 billion, was propelled by the company's stellar performance in its quarterly report, reigniting a market rally driven by a renewed sense of optimism surrounding the field of artificial intelligence (AI).
This surge saw Nvidia's stock prices skyrocket by 16.4 percent, reaching a record high of $785.38. Consequently, Nvidia's market capitalization surged to $1.96 trillion following the release of its January-quarter report, which showcased sustained high demand for its specialized chips utilized in AI computing applications.
Nvidia's meteoric ascent solidifies its standing as the world's fourth-largest company by market capitalization, trailing only behind behemoths such as Saudi Aramco, Microsoft Corp, and Apple Inc.
Headquartered in Santa Clara, California, Nvidia's exceptional performance injected fresh momentum into the global surge in technology stocks associated with AI. This surge propelled major indices such as the S&P 500, Europe's STOXX 600, and Japan's Nikkei share average to record highs.
Traders were particularly active in Nvidia's shares on Thursday, exchanging an impressive $65 billion worth of shares, representing nearly a fifth of all trading activity in S&P 500 stocks.
Nvidia's staggering increase in market value eclipsed previous records, surpassing Meta Platforms' $196 billion gain on February 2, following the parent company of Facebook's announcement of its first dividend and strong financial results.
The surge in Nvidia's market value on Thursday even surpassed the entire market capitalization of Coca-Cola, which stands at $265 billion.
Solidifying its dominance on Wall Street, Nvidia secured the position of the US stock market's third-most valuable company, surpassing giants like Amazon.com and Alphabet, after closely competing with them in recent weeks.
As of now, Microsoft and Apple remain the top two most valuable companies on Wall Street, boasting valuations of $3.06 trillion and $2.85 trillion, respectively.
Nvidia's stock has seen an impressive rise of 58 percent in 2024, contributing to more than a quarter of the S&P 500's year-to-date increase. This growth not only impacts direct shareholders but also extends to owners of index funds commonly held in retirement savings accounts.
The optimism surrounding AI technology continues to drive the global rally, with investors eagerly awaiting Nvidia's projected 233 percent growth in current-quarter revenue, surpassing market expectations of a 208 percent rise.
This surge in Nvidia's fortunes also catalyzed gains for other chipmakers in the AI industry, with Advanced Micro Devices witnessing an approximately 11 percent jump and Broadcom adding 6.3 percent. The Philadelphia chip index soared 4.97 percent to a record high, marking its most significant one-day gain since May 2023.
Despite the impressive growth trajectory, some analysts have raised concerns regarding potential challenges, such as US restrictions on chip sales to China, which could potentially impact revenue growth.
Nevertheless, the bullish sentiment among investors remains evident, with at least 17 brokerages raising their price targets following Nvidia's exceptional results, underscoring the continued optimism surrounding the company's prospects.
