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Nvidia AI chip demand hits record high

Nvidia President and CEO Jensen Huang speaks during the company’s event at the 2019 Consumer Electronics Show on January 6, 2019 in Las Vegas.

David Paul Morris | Bloomberg | Getty Images

NVIDIA It’s inching closer to a $1 trillion market cap as it tracks toward an all-time high share price Thursday morning on the back of a huge earnings report that beat consensus estimates.

Nvidia’s all-time high occurred in November 2021, when the share price rose above $333. Shares are on track to open Thursday at $396.

The chipmaker’s market cap was on track to open at $975 billion after a 30% jump in after-hours trading on Wednesday. The company reported first-quarter adjusted earnings of $1.09 per share, versus the Refinitiv consensus estimate of 92 cents. Its first quarter revenue of $7.19 billion was well above the consensus estimate of $6.52 billion.

But it was the chipmaker’s leading position as an AI chip supplier, guiding to $11 billion in sales for the current period, that may have pushed shares even higher.

The share price surge puts Nvidia within reach of a trillion-dollar valuation, something few publicly traded companies have ever achieved. Apple It was first valued at $1 trillion in 2018 and is set to reach a $3 trillion valuation in 2022. Alphabet, AmazonSaudi Aramco, Tesla, meta And Microsoft All have been valued at $1 trillion or more at one point.

Analysts sharply raised price targets for Nvidia after the company reported earnings results. JPMorgan doubled its price target from $250 to $500 and reiterated its overweight rating. “Generative AI and large language/transformer models are rapidly driving demand,” said JP Morgan analyst Harlan Sur.

“What else can we say other than wow,” Evercore analyst CJ Muse wrote in a Wednesday note. Evercore raised its price target from $320 to $500 and reiterated its outperform rating.

The meteoric rise in Nvidia’s valuation isn’t lifting other chip makers, however. The AI ​​chip craze has been fueled by the demand for high-powered graphics processing units, or GPUs. The company has been a historical outperformer in the high-performance “discrete” GPU market, especially compared to intel,

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Shares of Nvidia have outperformed the share prices of both Intel and AMD.

But neither Intel, which has reportedly struggled to handle inventory concerns and recently executed significant cost cuts, nor amd Has been able to achieve the same level of share price growth as Nvidia. Intel shares were up nearly 10% year-to-date at market close on Wednesday; AMD shares were up 67% at the same time.

Nvidia shares were already up 109% year-to-date before the after-hours surge.

CNBC’s Michael Bloom and Kiff Lesswing contributed to this report.

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