Nvidia hit a stock market valuation of $2tn on Friday as the US chipmaker capitalizes on the artificial intelligence boom.
An extraordinary surge of the company’s shares had already propelled it past Amazon and Alphabet, the owner of Google and YouTube, to become the third largest in America.
But another blockbuster earnings report – in which Nvidia blew past Wall Street’s expectations with a 265% jump in sales – sparked a fresh rally this week.
It took more than two decades for the Santa Clara, California-based company to hit a valuation of $1tn on the market. Less than nine months later, Nvidia reached $2tn.
Shares in the group began climbing on Friday when New York opened for trading, allowing it to fleetingly scale the milestone. They later faded, however, and finished the day up 0.4%, with a valuation of about $1.97tn.
The benchmark S&P 500 also cleared 5,100 for the first time during early trading, before slipping back. Both the S&P 500 and the Dow Jones industrial average ended the week at fresh record highs, however, as Wall Street continues to scale new peaks.
Nvidia is at the heart of the AI gold rush, with those developing the technology relying heavily on its wares. Microsoft, OpenAI, Amazon, Meta and Google have all struck deals to purchase the firm’s chips in bulk as they scramble to release new AI products and features.
This remarkable acceleration in demand has turbocharged Nvidia’s business, with the group’s most closely watched profit figure – revenue from data centers – up by more than 400% in the last quarter, at $18.4bn.
Jensen Huang, its founder and CEO, hailed a “tipping point” for faster computing generative AI as the company published its latest earnings report on Wednesday.
Nvidia’s financial performance, and the broader demand for its shares, has become seen as bellwethers for overall interest in AI. Since the turn of the year, the company’s stock has soared by more than 60%.
Expectations around its growth trajectory have been stoked by Nvidia’s plans to ship a new chip, the B100, at the highest end of its product line later this year. Some key players, like OpenAI’s Sam Altman, are holding talks on plans for rival AI chip ventures.