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Nvidia shares rose again Thursday, extending the stock’s dizzying run to a new record high, as the market leader in producing artificial intelligence chips continues to dominate its big-tech rivals.
Nvidia (NVDA) which took just 74 trading days to add another trillion in value and pass the $3 trillion mark, is now set to open as the world’s most valuable company, having overtaken Microsoft. (MSFT) Late Tuesday and Apple (Camel) Earlier in the month.
The stock is scheduled to open on Thursday with a value of $3.43 trillion, increasing its gains for 2024 by about $2.1 trillion.
Related: Analyst resets price target for Nvidia stock price as CEO unveils new AI platform
The tech giant’s latest boom began in the spring of 2023 with revenue growth forecasts that shocked Wall Street and cemented the group’s position as the benchmark for the artificial intelligence market.
Since then, under the leadership of co-founder Jensen Huang, Nvidia has tightened its grip on the market for advanced chips and processors that support the new wave of AI systems under construction from tech giants like Amazon. (Amzn) Google (Google) And meta platforms (dead) .
In fact, these so-called hyperscalers are expected to spend about $92 billion this year alone building their massive computing infrastructure. The effort reflects a move by their customers to leverage their massive data sets to boost sales of everything from drive-thru dining to more complex pharmaceutical tests.
Nvidia gets a boost from Blackwell processor launch
This helps Nvidia, which earlier this spring launched a line of Blackwell computing processors. Blackwell will likely replace the company’s standard H100 chipsets and see steady revenue gains.
“Right now, we’re in the seed investment or research phase in AI, where companies, governments, cloud providers, etc. are investing in AI and trying to figure out what it can do for them,” said John Bilton, portfolio manager. Manager at Gabelli Funds.
“Hardware providers like Nvidia are benefiting, and I think there is still room to get this initial phase going.”
Related: Analysts fix Nvidia stock price targets as earnings address key issue
Nvidia said last month that current-quarter revenue would rise to about $28 billion, with a 2% margin of error, even as it said its Blackwell system processors and software wouldn’t start shipping until the latter half of the year.
Analysts were concerned that the gap between existing H100 chips and Blackwell’s new offering would create a kind of air pocket in revenue as customers dump orders for old chips and wait for the newer system.
GPUs like the Blackwell are more efficient than CPUs, like the H100. So the total cost of ownership of running a data center with Nvidia GPUs is lower than the cost of running a data center with CPU servers, Gabelli Funds’ Belton said.
“Therefore, there is an argument that the installed base of CPU servers and data centers will need to be replaced by GPUs in the coming years, and there should be continued tailwinds for Nvidia from data center upgrades and data center modernization,” he added.
Next stop for Nvidia stock: $4 trillion?
Dan Ives of Wedbush, a long-time Nvidia supporter, likens its GPUs to “the new gold or oil in the technology sector,” which will power the “Fourth Industrial Revolution.” He says that this revolution is already well underway.
“It’s all about the pace of AI spending in data centers, where the only game in town using GPUs to run generative AI applications is all going through Nvidia,” Ives said. “We believe that over the next year, the race to the $4 trillion market cap in technology will be front and center between Nvidia, Apple and Microsoft.”
More AI stocks:
- Analysts are retooling C3.ai share price targets after earnings
- Analysts revamp Salesforce stock price targets after earnings
- Veteran fund manager issues blunt warning about Nvidia stock
Nvidia shares rose 3.4% in pre-market trading to signal an opening bell price of $140.19. Such a move would push the stock’s 2024 gains to over 210%.
The group’s 10-for-1 stock split, which was completed earlier this month, has added to speculation that Nvidia could be added to the Dow Jones Industrial Average. Chip maker Intel (you are K) The company, valued at $130 billion, is seen as the most likely candidate for replacement.
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