As AI boom drives stellar forecasts, Nvidia is on the verge of becoming the first trillion-dollar chip company

On Wednesday, Nvidia, the fifth-most valued US firm, forecast quarterly revenue that was more than 50% higher than Wall Street expectations.

Highlights :

  1. The share price of Nvidia reached a record high in premarket trading.
  2. The positive profits spurred a surge in the semiconductor industry, and Alphabet
  3. Microsoft, and AMD all saw gains of between 2 and 8 percent.

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The rise of generative artificial intelligence (AI) is everything, everywhere, at once, according to Nvidia.

The stock of the chip designer increased by 25% on Thursday as a brilliant projection revealed that Wall Street has not yet priced in the AI potential of the business, which has already doubled in value by 2023.

Nvidia was expected to increase its market valuation by around $189 billion (about Rs. 15,63,914 crore) to $945 billion (nearly Rs. 78,19,572 crore), causing its shares to reach an all-time high in premarket trade.

Stock markets from Japan to Europe rose as a result of the positive earnings, which also prompted a surge in the semiconductor industry and AI-focused companies. Companies including Alphabet, Microsoft, and AMD had gains of between 2 and 8 percent in the US.

In a hurry, analysts increased their price targets for Nvidia stock, with 21 analysts changing their opinion that the business holds the key to the future of AI since it supplies the processors that enable ChatGPT and several other services of a similar nature.

“In the more than 15 years we have been in this business, we have never seen a guide like the one Nvidia just put up with the second-quarter outlook that was by all accounts cosmological, and which annihilated expectations,” said Stacy Rasgon of Bernstein.

On Wednesday, Nvidia, the fifth-most valuable US firm, forecast quarterly revenue that was more than 50% higher than Wall Street expectations. The company also stated that it will have more AI chips available in the second half of the year to satisfy increased demand.

A $1 trillion (approximately Rs. 82,74,230 crore) of present equipment in data centres would need to be replaced with AI chips when generative AI is integrated into every good and service, according to CEO Jensen Huang.

The results are encouraging for Big Tech firms, who have moved their attention to AI in the belief that the technology could boost demand at a time when their key revenue generators, cloud computing and digital advertising, are under pressure from a sluggish economy.

“This Nvidia forecast transforms the entire narrative surrounding artificial intelligence and demand projections in the industry. Nvidia is the important barometer, and there may be a historical turning point in the AI Revolution, according to Dan Ives of Wedbush.