Nvidia (NVDA), the renowned chipmaker, became the world’s most valuable company in terms of market cap on Tuesday. As of today, its market value stands at an impressive $3.33 trillion, surpassing both Apple and Microsoft. This marks a significant milestone for the tech giant, which has been on an impressive growth trajectory over the past few years.
Founded in 1993, Nvidia initially focused on the gaming industry, developing powerful graphics processing units (GPUs) that revolutionized computer graphics. Over time, the company expanded its reach into various sectors, including artificial intelligence (AI), data centers, and automotive technology, leveraging its expertise in GPU design to drive innovation and growth across multiple industries. This remarkable ascent is a testament to Nvidia’s leadership in the AI race and its pivotal role as a chip supplier for companies venturing into AI technologies.
The surge in Nvidia’s market cap can be attributed to several factors. First and foremost, the company dominates the artificial intelligence (AI) chip market, with its AI accelerators capturing between 70% and 95% of the market share. Additionally, Nvidia recently reported staggering first-quarter earnings of $26 billion, more than triple its earnings from the same period last year. Investors are bullish on the company’s growth prospects, especially considering its recent announcement to release a new AI chip annually.
These growth prospects have caused many analysts to raise their price targets on the AI giant. Patrick Seitz, Investors Business Daily author, wrote that on Tuesday “Rosenblatt Securities analyst Hans Mosesmann reiterated his buy rating on Nvidia stock and raised his price target to 200 from 140.” This increased price target led to a 3.5% rise in Nvidia's stock on Tuesday which was the boost needed to surpass Microsoft and Apple as the most valuable company.
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