Eyes widened, jaws dropped, and hearts pounded at the New York Stock Exchange as investors reveled in the stunning potential of Nvidia, a trailblazer propelling the AI revolution.
The buzz grew louder after Wednesday’s remarkable earnings report. Nvidia’s shares soared a whopping 24.4%, nearly claiming the title for the largest single-day gain in market capitalization for a U.S. company.
With its current market cap sitting pretty at $939 billion, Nvidia is on the precipice of a remarkable feat – becoming the fifth U.S. public company worth over $1 trillion and the first-ever chipmaker to cross this threshold. Currently, this exclusive club, otherwise known as the four-comma club, hosts only four members: Apple, Microsoft, Alphabet, and Amazon.
So, what makes Nvidia the apple of investors’ eyes? In essence, if we liken AI to a modern gold rush, Nvidia is the master supplier of indispensable pickaxes.
The tech titan specializes in crafting chips vital for training AI models. For instance, the BBC reports that 10,000 Nvidia graphic processing units (GPUs) powered the training of ChatGPT on a Microsoft supercomputer.
Given the ever-growing AI integration across industries, the demand for such hardware is skyrocketing. Nvidia’s latest earnings report projected an astonishing $11 billion in revenue for the upcoming quarter, shattering previous estimates of $7.2 billion. And that’s just the tip of the iceberg: Nvidia’s CEO Jensen Huang (now a stratospheric billionaire) indicated that as more companies embrace AI, outdated data center equipment worth a whopping $1 trillion would be replaced with new-generation chips.
The investment world was awash with astonishment upon grasping Nvidia’s central role in the AI realm.
“We simply have no historical precedent for the magnitude of this step function.” – Morgan Stanley “The magnitude of upside is stunning.” – Truist “Almost unimaginable.” – Susquehanna
The Takeaway
Nvidia’s impressive earnings and rapid growth in the AI sphere dismiss any notion of an AI bubble. Instead, it hints at the dawn of an AI-driven Fourth Industrial Revolution, as proposed by Wedbush’s Dan Ives. This may be the high-stakes, high-reward opportunity that forward-thinking investors have been waiting for.