Nvidia Nearing $1 Trillion Market Cap Milestone

As trading opens today, Nvidia is poised to achieve a remarkable milestone by reaching a $1 trillion market capitalization. Pre-market trading pushed Nvidia’s shares to $409, positioning the company to join the exclusive club of predominantly tech companies that have reached this valuation.

To maintain this distinction, Nvidia’s shares must remain above $404.86.
The chipmaker experienced a surge in share prices last week after surpassing consensus estimates with impressive quarterly earnings figures. This boost not only lifted Nvidia but also positively impacted other chipmakers, except Intel. The optimistic forecast contributed to the market’s enthusiasm.

Of particular note, Nvidia’s sales forecast for the second quarter of 2024 is $11 billion, exceeding consensus estimates of $7.15 billion by a significant margin—approximately a 50% difference.

This year has been prosperous for chipmakers, various sectors of the tech industry, and the Nasdaq. Factors such as the AI frenzy and the possibility of a slowdown in Federal Reserve rate hikes have driven the positive performance. Alongside Nvidia, companies like Alphabet, Meta, and Microsoft also experienced gains in last week’s trading.

Nvidia’s graphics processing units (GPUs) are critical in generative AI platforms like OpenAI’s ChatGPT and Google’s Bard. While historically known as a leader in discrete GPUs primarily used for gaming, the rise of cryptocurrency mining and AI has expanded their utility. This shift in perception has contributed to the significant increase in share prices for GPU manufacturers and suppliers like Nvidia, AMD, and TSMC in recent months.

In contrast, Intel, which faced inventory issues and development challenges, has mainly focused on central processing units (CPUs) in the chip market. Consequently, Intel has witnessed a different level of investor interest than its counterparts.

If Nvidia achieves its anticipated market capitalization, it will join the ranks of companies like Apple, Alphabet, Amazon, and Microsoft, which have already surpassed the $1 trillion mark. Before today’s trading, Nvidia shares had already recorded an impressive 166.5% increase year-to-date.