The ‘New Gold Rush’: The Nvidia Stock Market Has Been on a Hot Streak Lately – Why?

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solo27 May 2023Last Update : 4 days ago
The ‘New Gold Rush’: The Nvidia Stock Market Has Been on a Hot Streak Lately – Why?

The chip maker’s stock has soared more than 20 percent this week, riding the AI ​​boom as its market value approaches $1 trillion.

US tech firm market value NVIDIA artificial intelligence tools such as chatgpt,

The company, based in Santa Clara, California, is inching closer to joining the exclusive club of $1 trillion (about €932 billion) companies like Alphabet, Apple and Microsoft, as its shares jumped more than 24 percent on Thursday.

The maker of graphics chips for gaming and artificial intelligence this week reported quarterly profit of more than $2 billion (€1.8 billion) and revenue of $7 billion (€6.5 billion), both exceeding Wall Street expectations.

Yet sales estimates of $11 billion (€10.2 billion) surprised Wall Street in the quarter. This is a 64 percent jump over the same period last year, and above the $7.2 billion (€6.7 billion) industry analysts were forecasting.

“It looks like the new gold rush is upon us, and Nvidia is selling all picks and shovels,” wrote Christopher Roland and Matt Myers of Susquehanna Financial Group.

Chip makers around the world got pulled along. Shares of Taiwan Semiconductor rose 3 per cent, while South Korea’s SK Hynix gained 6 per cent. Netherlands-based ASML added 5 percent.

Jensen Huang, Founder and CEO of Nvidia, said that the world’s data centers need to change in view of the transformation coming with AI technology.

AI chips are designed to perform artificial intelligence tasks faster and more efficiently.

While general-purpose chips like CPUs can also be used for simple AI tasks, they “are becoming less and less useful as AI advances,” a 2020 report from Georgetown University’s Center for Security and Emerging Technology notes. have been”.

“Because of their unique characteristics, AI chips are tens or even thousands of times faster and more efficient than CPUs for training and inference of AI algorithms,” the report said. their greater efficiency.

Analysts say Nvidia may be getting an early glimpse of how AI could reshape the tech sector.

Wedbush’s Dan Ives wrote, “Nvidia delivered incredibly strong guidance last night that will be heard around the world and reflects the historic demand for AI now happening across the enterprise and consumer landscape.”

“For any investors calling this an AI bubble … we would point them to this Nvidia quarter and especially to guidance that reinforces our bullish thesis around AI and now with AI on the doorstep is the fourth industrial revolution.” talks about revolution”.

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