On the New York Stock Exchange, Nvidia’s stock price soared more than 7% right after the opening to USD 419 and surpassed USD 1 trillion in market capitalization during the day.Nvidia’s market capitalization, which remained at the $1 trillion level until early afternoon, closed at just over $990 billion. It could remain in the $1 trillion club based on the closing price only when it closed above $404.86 per share, but it closed at $401.11.In the New York Stock Exchange, there are only five clubs with a market capitalization of $1 trillion, including Apple, Microsoft (MS), Google’s parent company Alphabet, Amazon, and NVIDIA. It is only a single digit worldwide, and Nvidia met this standard for the first time in history as a semiconductor company.Prior to Nvidia, Facebook’s parent company Meta Platforms crossed the $1 trillion mark in June 2021 and electric vehicle company Tesla crossed the $1 trillion mark in October 2021, respectively, before stepping back.According to the Wall Street Journal (WSJ), Meta’s stock price plunged 25% and Tesla’s stock price plunged 41%, respectively, after joining the $1 trillion club.
The AI boom triggered by Chat GPT played a decisive role in Nvidia’s run, whose stock price soared more than 166% this year alone.NVIDIA supplies more than 90% of high-performance graphics processing units (GPUs), which are considered essentials for driving generative AI such as Chat GPT, in the global market.More than 10,000 GPT (A100) of Nvidia were also used in GPT-4, a large-scale language model recently released by Open AI, a developer of Chat GPT.In particular, Nvidia’s market capitalization soared by $184 billion on the 25th alone, when its own forecast was that sales in the next quarter (May-July) would exceed Wall Street forecasts thanks to the AI boom.
Nvidia is launching a variety of new AI-related products, including AI supercomputing service ‘DGX Cloud’.Founded in 1993, Nvidia’s GPU products were initially recognized as games, but they are greatly expanding their scope to virtual currency mining and AI utilization.Nvidia is considered one of the few companies that have actually generated large profits due to the AI craze, but there are concerns that the recent surge in stock prices may be excessive.
Cathie Wood, CEO of Ark Investment, a famous investor known as the “money tree sister,” pointed out on Twitter the previous day that Nvidia’s stock price was excessive. Wood’s company sold Nvidia in January, but the stock has more than doubled since then.
Chang Young Choi
US ASIA JOURNAL
