Global Courant 2023-05-25 19:09:32
Microchip maker Nvidia Corp. was poised to join an exclusive list of companies valued at more than $1 trillion on Thursday, when the company said feverish demand for AI technology fueled booming demand for its products.
Shares of the chip designer — which have already doubled in value this year — rose another 28 percent on Wall Street in premarket trading on Thursday after the company said it sees unprecedented demand in just about every facet of its business.
The company’s shares were worth $305 apiece on Wednesday, enough to value the company at more than $750 million US. At some point Thursday morning, they hit $400, enough to value the company at over $1 trillion US.
Prior to Thursday, only four U.S. companies were in that exclusive club: Apple, Microsoft, Google parent company Alphabet and Amazon. Meta and Tesla had previously achieved the feat, but both companies have fallen dramatically since last year.
If the company manages to maintain a market profit of at least $210 million through the end of the day, it would mark the largest one-day increase in value ever for a US company.
Growing demand
The company forecast quarterly revenue for the second quarter of this year to exceed $11 billion. That’s more than 50 percent higher than Wall Street had anticipated.
CEO Jensen Huang said demand for chips is strong in the existing business, but also emerging in new ones related to AI.
“A trillion dollars of installed global data center infrastructure will transition from general use to accelerated computing as companies race to adopt generative AI in every product, service and business process,” said Huang.
“We are significantly increasing our offerings to meet rising demand,” he said.
‘A game changer’
Analysts used breath-taking superlatives to describe the company’s stunning prospects.
“In the more than 15 years of doing this work, we’ve never seen a guide like the one Nvidia just put up with a Q2 outlook that was cosmological in every way and shattered expectations,” said Stacy Rasgon of Bernstein. .
Dan Ives, a technology analyst at Wedbush, called the company’s forecast a “game changer.”
“Last night, Nvidia issued some stunning robust guidance that will be heard around the world that shows the historic demand for AI now happening across the business and consumer landscape. For any investor calling this an AI bubble, we would point them to this Nvidia quarter and . .. speaks to the 4th industrial revolution now upon us.”
