Nvidia’s opens new tab stock market value closed above $2 trillion for the first time on Friday after an upbeat report from Dell Technologies opened a new tab reignited Wall Street’s AI-fueled rally. The tech giant, which sells high-end servers made with Nvidia’s processors, gave an upbeat forecast late on Thursday, pointing to a surge in orders for its AI-optimized servers. The market responded fervently, with Nvidia’s shares adding 4% and its stock market capitalization surpassing the threshold for the first time since a devastating 2023 slump hit it.
Nvidia has benefited tremendously from the rise of artificial intelligence, fueled by massive investments in data centers that can compute and process complex coding and math operations at a staggering rate. The chip maker churns out the advanced chips that power these data centers, and its products have become an essential component of many companies’ efforts to democratize AI by providing a way for small developers to tap into the technology to build applications for augmented reality, self-driving cars and much more.
That’s why Nvidia stock has been booming all year, with the firm’s market cap gaining more than 223% through November. It also has become one of the S&P 500’s best-performing stocks this year.
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Despite its meteoric gains, Nvidia is still relatively cheap compared with rivals, Bernstein’s Stacy Rasgon told CNBC on Wednesday. She believes the stock is “cheaper than a typical semiconductor firm, especially when demand for their products is so robust.”
It’s not just Nvidia that has benefitted from this growing interest in AI. Many other chip makers are churning out the latest in AI-focused silicon. Big technology giants like Amazon, Google, and Microsoft are also investing heavily in their efforts to develop generative AI capabilities. However, none of these companies has yet to match Nvidia’s success in building a platform that enables its customers to access this powerful technology quickly and easily.
Nvidia’s stock has become the most traded on Wall Street by market value, with investors exchanging an average of $36 billion of the chipmaker’s shares over the past 30 sessions, compared to just over $21 billion for Tesla. On Friday, the number was even higher, with trading reaching a record $38 billion.
The bottom line is that Nvidia’s meteoric rise could be far from over. The company’s market value could surpass $3 trillion above Apple and Microsoft’s valuations. And with its products in a wide range of industries, there are plenty of opportunities for the maker of graphics processing units (GPUs) to keep climbing.