NVIDIA has reached several milestones this week. The firm led by Jen-Hsun Huang has just joined the exclusive —and tiny— club of companies whose market valuation exceeds a trillion dollars. And, as if this were not enough, he has become the first member of the semiconductor industry to hold the aforementioned achievement.
It is a historical event that we saw coming and that has just materialized. The company’s shares soared last week after its projections for the current quarter (ending in July) called for record profits driven by sales of its solutions for the growing artificial intelligence (AI) market.
NVIDIA, in the club of Apple, Microsoft, Google and Amazon
Last Wednesday, NVIDIA shares were trading slightly above $300, but moments after the NASDAQ stock market closed (4:00 p.m. in New York, 10:00 p.m. in Spain), these they raised their price more than 25% and exceeded $380. This translated into an addition of 190,000 million to the value of the company.
But it was only the prelude to what would come later. In the aftermarket on Tuesday, May 30, the shares broke the $400 barrier, standing at $406. This movement was enough for the capitalization of the graphic solutions giant to reach a value of more than 1,000,000,000,000 million dollars.
Currently, only a handful of technology companies can claim to have achieved or surpassed such an achievement. At the top of the list is Apple, whose market value exceeds 2 trillion dollars since 2018. It is followed by Microsoft, with 2.4 trillion dollars, and also Google and Amazon, with 1.5 and 1.2 trillion dollars respectively.
Now, staying in this position will be a huge challenge for NVIDIA, and its status as a trillion dollar company could change at any time. Its shares must trade above 404.86 to continue belonging to the mentioned club. For example, Meta was part of it, but last year its capitalization fell drastically.
If we stick to the company’s own forecasts, the boom times have just begun. NVIDIA, whose business model has long revolved around solutions consumer graphicshas become an elemental player in the race for artificial intelligence with hardware solutions in high demand.
The American giant is behind the high-performance A100 and H100 chips used for training AI models. In addition, it is working on new solutions that take advantage of its NVLink interconnect systems to offer complete propositions for its customers. For example, the Grace Hooper DGX GH200 supercomputer.
Let’s remember that NVIDIA is a manufacturer of chips without factory, also known as fabless. The company designs the chips, but does not produce them in its own factories. This important process is carried out by partners such as Taiwan Semiconductor Manufacturing Company (TSMC), Samsung and GlobalFoundries, who will also benefit from its growth.
Images: NVIDIA | mackenzie marco
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