Nvidia was on the path to becoming the first semiconductor company with a valuation of US$2 trillion, another milestone in its rise as the biggest beneficiary of the AI-related stock craze over the past year.
The chipmaker’s shares rose again yesterday, following Thursday’s 16% rally that touched $1.96 trillion. Thus Nvidia arrives as the fourth most valuable company in the world, after appreciating approximately 65% since the beginning of the year, with a market capitalization that is only behind those of Microsoft, Apple and Saudi Aramco and even more than Amazon.
While it took more than two years for Apple and Microsoft to go from $1 trillion to $2 trillion, Nvidia needed less than 12 months as its stock takes advantage of Wall Street’s AI frenzy.
Nvidia shares soared after presenting extraordinary results that reaffirmed Wall Street’s bets on the potential of its artificial intelligence technologies. The chipmaker also delivered guidance above expectations, driven by AI spending from its major customers, such as Meta Platforms.
Nvidia dominates the market for graphics chips designed for complex computing tasks needed to power the AI applications that companies are rushing to develop.
short bets
The rally in Nvidia shares that began Thursday has left short sellers about $3 billion in paper losses, according to an analysis by S3 Partners, which called it an “AI nightmare” for bears.
“Early mark-to-market losses were inescapable for many short sellers looking to trim their positions after the company’s earnings report,” Ihor Dusaniwsky, managing director of predictive analytics at S3, wrote in the note. “Short sellers will probably wait a bit to look for more favorable exit points.”
