Written by Dante Uzel on 01 August 2024 11:41
Nvidia has achieved the largest single-day increase in market value ever recorded on Wall Street. On Wednesday, the California-based chip maker saw its market capitalization surge by $330 billion, surpassing the previous record of a $277b gain set in February.
Shares of Nvidia soared nearly 13%, driven by optimism about sustained demand for its chips. This boost came after Microsoft announced a 60% increase in AI-related capital spending for the 2024 fiscal year, reaching $69b.
With its latest stock rally, Nvidia’s market cap has reached $2.88 trillion, positioning it as the world’s third-most valuable company, behind Apple and Microsoft. The company's stock briefly made Nvidia the most valuable company globally in June, overtaking Microsoft with a market cap of $3.335 trillion.
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Over the past year, Nvidia’s shares have skyrocketed by more than 150 percent, the highest increase among major US companies. However, this remarkable performance has been accompanied by significant volatility; the recent surge followed a 7 percent drop the previous day, which erased $193b from the company’s value.
Nvidia, known for powering a range of devices from Android phones to gaming rigs, gained prominence with its GPU designs for Microsoft’s original Xbox and Sony’s PlayStation 3. Once recognized for showcasing impressive but costly hardware to gamers, Nvidia is now a key player in the AI sector.
At the beginning of 2023, Nvidia's shares were trading below $15. Less than two years later, they have exceeded $100. This dramatic increase is largely attributed to the soaring demand for GPUs driven by AI investments. Despite some skepticism about the practical applications of generative AI and machine learning, Microsoft's announcement of continued substantial investments in AI infrastructure has further propelled Nvidia’s stock, increasing its value by more than the worth of most companies in less than eight hours.
Tags: Nvidia
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