The market capitalization of Nvidia saw an unprecedented surge in the trading session on February 22, surpassing the record set by Meta Platforms just 3 weeks ago, as reported by Bloomberg.
The giant chip manufacturer’s stock ended the session with a 16% increase, adding $277 billion to its market capitalization, reaching nearly $2 trillion. Nvidia’s market capitalization growth in this session far exceeded the $197 billion increase in market capitalization that Facebook’s parent company achieved in early February.
“Nvidia is a cash-printing machine at this point. The company’s growth prospects also seem solid,” said Stacy Rasgon, an analyst at Sanford C. Bernstein.
Nvidia shares skyrocketed after the company announced earnings that surpassed all expectations, reaffirming the Wall Street’s bet on the potential of artificial intelligence (AI) technology pursued by the company.
In the last fiscal quarter, Nvidia – a company based in Santa Clara, California, USA – achieved revenue of $22.1 billion, a 265% increase compared to the same period last year, and net profit increased by 769% thanks to the AI frenzy. Nvidia’s chip products are used to train large AI models, including those developed by other tech giants such as Microsoft and Meta.
Regarding prospects in the coming quarters, Nvidia has shown no signs of slowing down. The current quarter forecast includes revenue of $24 billion, surpassing even the most optimistic expectations of analysts.
Nvidia’s data center segment, which supplies the H100 graphics chip used for AI training, achieved revenue of $18.4 billion in the last fiscal quarter, a 409% increase over the same period last year.
Nvidia’s positive prospects have led analysts to unanimously raise the target price for the stock. Analysts at JPMorgan Chase Bank raised Nvidia’s stock target price from $650 per share to $850 per share. Bank of America Global Research increased its target price for Nvidia shares from $800 per share to $925 per share.
At the close of trading on Wednesday, Nvidia shares reached $647.72 per share. Prior to the company’s financial report, the stock faced selling pressure as investors took profits and concerns that Nvidia would not meet the market’s high expectations.
“We have never seen a company’s quarterly revenue exceed its expectations by over $2 billion until Nvidia did so a few quarters ago. With the AI wave, surpassing such expectations has become a regular occurrence. The power from AI demand is still immense,” said Joseph Moore, an analyst at Morgan Stanley Bank.
The US stock market saw strong gains on February 22, led by Nvidia’s stock, with both the S&P 500 and Dow Jones indices setting new records. Moreover, the global stock market also had an impressive session thanks to Nvidia, as the company’s earnings encouraged investors in various markets to pour money into AI-related stocks.
The MSCI World Stock Index increased by 1.67%, reaching an all-time high. The Stoxx 600 Index in European stock markets rose by 0.82% at the close, after hitting an intraday record high.
