Photo by Christian Wiediger on Unsplash
Nvidia, the renowned chipmaker based in Santa Clara, California, achieved a historic milestone by becoming the first chipmaker to reach a market valuation of $1 trillion. The company's stock experienced a surge of over 5% during a session, briefly surpassing the trillion-dollar threshold before slightly retracting in the afternoon.
Joining the ranks of tech giants like Microsoft, Alphabet, Amazon, and Apple, Nvidia now stands as the ninth public company to reach the prestigious $1 trillion valuation. This achievement comes as Nvidia's shares have soared an impressive 165% since the beginning of 2023. The company's success can be attributed to its influential role in the field of artificial intelligence (AI), thanks to its powerful graphics cards and server products.
Recently, Nvidia unveiled a range of new AI-focused products, including a high-powered supercomputer and a platform that leverages generative AI for video game development. These announcements contributed to a staggering 26% surge in shares following Nvidia's better-than-expected quarterly results and guidance.
Experts highlight Nvidia's dominance in the AI market, positioning it as the sole provider of essential technology amid the ongoing AI "war." Raymond James managing director Srini Pajjuri noted the company's remarkable revenue growth as a result of this advantageous position.
Nvidia's revenue expectations for the second quarter are projected to be $11 billion, with a margin of error of plus or minus 2%. This forecast significantly surpassed Wall Street's predictions of $7.2 billion, leading to a surge in market enthusiasm. Pajjuri suggested that even beating the guidance by 5% would have been considered satisfactory, but Nvidia exceeded consensus estimates by an impressive 50%.
Market analysts overwhelmingly maintain a bullish stance on Nvidia, with 49 buy recommendations, 8 holds, and only 1 sell rating. The average price target for the stock is $439.73, indicating continued optimism among investors.
However, not all experts share the same sentiment. Cathie Wood, the founder of Ark Invest, expressed her belief that Nvidia is now overpriced, considering its current valuation of 25 times the expected revenue for this year. Nonetheless, Wood acknowledged Nvidia's early recognition of the AI potential and its ongoing influence in powering the AI age.
input from / Google, Tradingview
