Nvidia Achieved a remarkable success Milestone Reaching a market value of $2 trillion on Friday, due to unprecedented demand for its chips and its leading role in the rise of generative artificial intelligence (AI).

An Nvidia RTX 2060 video card. An Nvidia RTX 2060 video card.

An Nvidia RTX 2060 video card. Image credit: Christian Wediger via Unsplash, free license

The breakthrough came after an impressive earnings forecast from the chip designer, which added a staggering $277 billion to its market value on Thursday — the biggest one-day gain on Wall Street’s record. Is.

In the past year, Nvidia’s meteoric rise has prompted analysts to draw comparisons with pick-and-shovel providers during the 1800s gold rush. The analogy underscores Nvidia’s important role, as its chips are integral to nearly all major generative AI players, from OpenAI, the creator of chatGPT, to tech giant Google.

A wonderful journey from one company to another $1 trillion Reached a market value of $2 trillion in about nine months, making it the fastest climb among US companies. The feat was achieved in less than half the time it took other tech giants like Apple and Microsoft to reach $2 trillion.

Shares of Nvidia rose more than 4%, hitting a record high of $818 on Friday, consolidating its position as the third most valuable U.S. company. With nearly 60% growth this year, Nvidia has maintained its momentum after tripling in value in 2023.

Nvidia’s recent market-beating forecast, projecting a remarkable 233% growth in first-quarter revenue, helped propel global markets to record highs on Thursday.

Despite the substantial rise in shares, Nvidia’s valuation has seen a relative decline, largely due to a sharp rise in analyst estimates. Based on LSEG data, its forward 12-month price-to-earnings ratio is around 31, down from 49 times a year ago.

Some experts highlighted the expectation of increased capital spending among leading cloud computing companies to meet the growing demand for artificial intelligence training and estimation. Nvidia stands to benefit significantly from this trend, projecting a steady increase in revenue of two billion per quarter through fiscal 2025 as more chip supplies come online.

written by Vytautas Valinskas