New York CNN –
Booming demand for its AI chips has given Nvidia (NVDA) a top spot in one of Wall Street’s most exclusive clubs, with the chipmaker hitting a $1 trillion market cap on Tuesday.
It is only the ninth company in the world to achieve such a feat, and only five other companies in the world currently hold this distinction: Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN) and Saudi Aramco.
Nvidia surprised Wall Street last week when it reported gargantuan profits and an exceedingly strong revenue forecast for the coming year. Fueled largely by the recent AI boom, the report boosted its stock price and cemented its position as one of the largest publicly traded companies in the world.
Nvidia makes chips that support generative AI, a type of artificial intelligence that can create new content, such as text and images, in response to user input. This is the type of AI that underlies ChatGPT, Google’s Bard, Dall-E, and many other new AI technologies.
In its most recent quarter, the company’s earnings rose 26% to $2 billion and revenue rose 19% to $7.2 billion, both beating forecasts by Wall Street analysts. Nvidia’s guidance for the current quarter was also significantly — about 50% — ahead of analysts’ forecasts.
The stock is up about 180% so far this year.
“Nvidia has delivered a stunning, solid forecast that will be heard around the world and demonstrates the historic demand for AI that currently exists in the enterprise and consumer landscape,” said Dan Ives, analyst at Wedbush Securities. “Any investor calling this the AI bubble (crypto, metaverse, now AI bubble thesis), we would like to draw your attention to this Nvidia quarter and specifically to guidance that supports our optimistic thesis around AI and the 4. industrial revolution now coming with AI.”
Nvidia stock needs to stay above $404.86 to maintain a $1 trillion market cap. Shares of the stock are currently trading at $408.50.