In a staggering display of growth, Nvidia is on the precipice of joining the exclusive Wall Street trillion-dollar club in a remarkably short span of time.
On Thursday, the chip manufacturer witnessed a phenomenal 26% surge in its shares, propelling its market value to nearly $1 trillion, as reported by FactSet. This surge came swiftly, considering that just the day before, Nvidia’s market value stood at $755 billion.
Should Nvidia achieve this milestone, it would become the fifth publicly traded U.S. company to enter the prestigious trillion-dollar club. Apple initially established this exclusive league in 2018, and it has since been joined by the likes of Microsoft, Alphabet, and Amazon.
Highlighting their foresight, Needham analyst Rajvindra Gill remarked in a note on Thursday, “Back in late 2021, we began publishing work suggesting Nvidia would become the first semiconductor company with a trillion-dollar market cap. While there were fluctuations along the way, we believe Nvidia is now positioned to attain that valuation over time.”
The spotlight now falls squarely on Nvidia following its prediction, released late on Wednesday, of $11 billion in sales for the second quarter of its fiscal year 2024. This optimistic outlook was attributed to the escalating demand for Nvidia’s graphics processors, which power artificial intelligence applications utilized by industry giants such as Google, Microsoft, and the creators of ChatGPT, OpenAI. The company’s forecast defied expectations on Wall Street and transformed the AI-driven excitement surrounding the stock into tangible outcomes.
Gill further observed, “Customers are eagerly striving to meet the rising demand for large language models (LLMs) and generative AI across various domains. We believe that the obstacles faced in the past are now mostly behind us, and we anticipate that the company will fulfill the immediate, AI-related demand.”
Even before Thursday’s astounding surge, Nvidia’s shares had already soared by 108% throughout the year. With its sales projections surpassing analyst estimates by more than 50% for the quarter, Nvidia’s market value has experienced an almost instantaneous and dramatic surge.
Vivek Arya, an analyst at Bank of America, expressed that Nvidia’s upgraded outlook for the current quarter is the most significant the firm has witnessed within its coverage. Arya believes that the company’s market capitalization is now on a trajectory toward “1 trillion and beyond.”
In light of this impressive performance, Arya and several other analysts have raised their price targets for Nvidia’s stock. One analyst even envisions a potential upside of up to 64% from the previous day’s closing price.