Last Update: May 26, 2023, 02:04 AM IST
New York, United States (USA)
NVIDIA is taking advantage of AI to improve its chip designs. (Image: Reuters)
Nvidia shares soared 27 percent, setting them up for a record performance with a market cap of more than $900 billion.
The market valuation of Nvidia, the US firm specializing in chips coveted in the artificial intelligence boom, inched closer to $1 trillion on Thursday after the company smashed last quarter’s earnings expectations.
Nvidia shares soared 27 percent, setting them up for a record performance with a market cap of more than $900 billion.
If Nvidia hits the one trillion mark, it will join a club of only five companies — all US tech giants except Saudi Aramco, the oil giant.
Nvidia’s chips are a central component to the generative AI revolution, capable of delivering the computing heat needed to churn out complex content in seconds from data centers around the world.
The company surprised the markets on Thursday with revenue guidance for this coming quarter of $11 billion, which was 50 percent higher than most forecasts.
“This is a game changer and will have a major impact in the tech space,” said a note from Wedbush Securities.
Prior to Thursday’s big move, Nvidia shares had already doubled in 2023 amid the frenzy over AI chatbots like OpenAI’s ChatGPT and Google’s Bard.
– ‘Chasing Nvidia’ –
Founded thirty years ago by American-Taiwanese engineer Jen-Tsun “Jensen” Huang, this little-known company was initially a star in the video game world.
The Silicon Valley-based company has long been known for graphics processing units (GPUs) that improve image quality for gamers and eliminate response lag times.
The ability of GPUs to intelligently handle complex tasks makes them superior to traditional computer chips when it comes to graphics as well as processing involving artificial intelligence.
“Nvidia has become synonymous with AI,” independent technology analyst Rob Enderle told AFP.
The company “has been investing in the AI boom for almost two decades. They saw an opportunity, and now everyone is chasing it,” he said.
Some GPUs used in data centers cost tens of thousands of dollars, giving Nvidia huge returns while also raising concerns that the future of AI innovation will be out of reach for smaller companies.
Uncomfortable with its reliance on outside providers such as Nvidia, the US tech giant is investing heavily in developing its own chips and bringing the technology in-house.
Nvidia’s share price contrasts with other chip makers, which are predicting a downturn in the market this year, mainly due to lower demand for personal computers.
This trend has led to a sharp decline in Nvidia’s video game revenue, but an increase in AI-driven data center activity has more than offset this slump.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – AFP,
