Shares of Nvidia jumped 27 per cent by Friday, approaching a $1 trillion market value, after the US chip designer projected quarterly revenue more than 50 per cent above estimates, in a sign that Wall Street has grossly underestimated its role in powering the artificial intelligence revolution.
The world's most valuable chip company's new market valuation at $963.3 billion may soon rank it among the tech elite, including Apple, Microsoft, Amazon and Alphabet.
“I’d be reluctant to say it has won the race, but it is winning right now,” Zeno Mercer, senior research analyst at ROBO Global, told Bloomberg News.
Following an AI-fuelled sales forecast this week that blew Wall Street targets out of the water, Nvidia’s value surged by $184 billion on Thursday.
That was the third-biggest one-day gain in market capitalisation ever recorded in the US.
Nvidia was co-founded in 1993 by Jensen Huang, who still runs the company, and it has pushed its technology into new markets, such as data centre servers and AI processing – a move that is proving prescient today.
The chipmaker has won orders to equip giant computing factories by successfully arguing that graphics chips can handle AI workloads better than more standard processors.
The company’s sales in the three months ending in July will be about $11 billion, Nvidia said late on Wednesday, shattering an average analyst estimate of $7.18 billion.
“We’re seeing incredible orders to retool the world’s data centres,” Mr Huang told analysts on a conference call.
A trillion dollars of data centre infrastructure will be upgraded to handle so-called accelerated computing, he said, letting them run generative AI tools such as ChatGPT.
“The budget of a data centre will shift very strongly to accelerated computing,” he added.
Shares in the company rose 2.54 per cent to $389.46 by market close on Friday.
Agencies contributed to this report
Hotel Silence
Auður Ava Ólafsdóttir
Pushkin Press
Global state-owned investor ranking by size
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UAE
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Killing of Qassem Suleimani
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Arsenal win 5-4 on penalties
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What are NFTs?
Are non-fungible tokens a currency, asset, or a licensing instrument? Arnab Das, global market strategist EMEA at Invesco, says they are mix of all of three.
You can buy, hold and use NFTs just like US dollars and Bitcoins. “They can appreciate in value and even produce cash flows.”
However, while money is fungible, NFTs are not. “One Bitcoin, dollar, euro or dirham is largely indistinguishable from the next. Nothing ties a dollar bill to a particular owner, for example. Nor does it tie you to to any goods, services or assets you bought with that currency. In contrast, NFTs confer specific ownership,” Mr Das says.
This makes NFTs closer to a piece of intellectual property such as a work of art or licence, as you can claim royalties or profit by exchanging it at a higher value later, Mr Das says. “They could provide a sustainable income stream.”
This income will depend on future demand and use, which makes NFTs difficult to value. “However, there is a credible use case for many forms of intellectual property, notably art, songs, videos,” Mr Das says.
UAE currency: the story behind the money in your pockets
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PAKISTAN SQUAD
Abid Ali, Fakhar Zaman, Imam-ul-Haq, Shan Masood, Azhar Ali (test captain), Babar Azam (T20 captain), Asad Shafiq, Fawad Alam, Haider Ali, Iftikhar Ahmad, Khushdil Shah, Mohammad Hafeez, Shoaib Malik, Mohammad Rizwan (wicketkeeper), Sarfaraz Ahmed (wicketkeeper), Faheem Ashraf, Haris Rauf, Imran Khan, Mohammad Abbas, Mohammad Hasnain, Naseem Shah, Shaheen Afridi, Sohail Khan, Usman Shinwari, Wahab Riaz, Imad Wasim, Kashif Bhatti, Shadab Khan and Yasir Shah.
Wicked
Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
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Favourite food: Japanese
Favourite car: Lamborghini
Favourite hobby: Football
Favourite quote: If your dreams don’t scare you, they are not big enough
Favourite country: UAE
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