The surge came after Nvidia’s quarterly report exceeded expectations, with its stock rising 15% to $774.18 and its market cap surpassing $1.9 trillion. The company’s impressive performance was driven by strong demand for its AI and HPC GPUs as well as graphics cards for gaming and professional visualization applications, making it the third most valuable company in the U.S. stock market (after Microsoft and Apple) and the fourth most valuable company in the world (after Microsoft, Apple, and Saudi Aramco).
Nvidia’s growth is attributed to the soaring demand for Nvidia’s processors as the world’s largest high-tech companies (including large cloud service providers like Microsoft, Google, Meta, and others) rush to enhance their AI compute capabilities. Despite concerns about the impact of U.S. restrictions on chip sales to China, Nvidia’s dominance in the high-end AI processor market remains unchallenged, controlling about 80% of the market.
As a result of Nvidia’s gains, Jensen Huang, a co-founder and the CEO of Nvidia, has seen his wealth increase by $8.5 billion to $68.1 billion, which made him the world’s 21st richest individual, according to the Bloomberg Billionaires Index. Nvidia’s growth has propelled Huang ahead of notable figures like Charles Koch, CEO of Koch industries, and Zhong Shanshan, one of the wealthiest businessmen in China. The company’s success has also benefited other billionaires in the technology sector, with the fortunes of 28 billionaires linked to AI increasing by a combined $35.7 billion, notes Bloomberg.
Nvidia’s stock has seen a 57% increase in 2024, significantly contributing to the S&P 500’s gains. However, some analysts and investors are cautious about the rapid pace of these gains. Following the earnings report, numerous brokerages raised their price targets for Nvidia, with Rosenblatt Securities setting one of the most optimistic targets at $1,400, according to Reuters.
