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Nvidia's AI Gold Rush: Stock Hits Record High with $3.39 Trillion Market Cap

AInvestMonday, Oct 14, 2024 9:00 pm ET
1min read

Nvidia's stock soared to a new record high on Monday, closing with a market cap of approximately $3.39 trillion. This milestone positions it as the second-largest U.S. publicly traded company by market value, just behind Apple. As earnings season approaches, major clients prepare to disclose their AI infrastructure investment plans, further fueling enthusiasm for Nvidia's prospects.

Monday's trading saw Nvidia shares rise 2.4%, closing at $138.07. This marks a significant climb from its previous all-time high of $135.58 set on June 18. The stock has soared nearly 180% this year, with a remarkable increase over ninefold since January 2023.

Nvidia is widely recognized as a pivotal player in the AI boom, often described as the provider of essential tools in the AI "gold rush." Its GPUs are crucial for developing and deploying advanced AI models, supporting applications like ChatGPT. Major companies, including Microsoft, Meta, Google, and Amazon, are heavily investing in Nvidia's GPUs to bolster their AI capabilities and infrastructure.

Analysts highlighted that Nvidia's dominance in the AI chip market remains robust, controlling around 95% of the AI training and inference segment. The demand for its next-generation GPUs, like the highly anticipated Blackwell, is expected to significantly boost revenues in the upcoming quarters, possibly reaching into billions in the fourth quarter alone.

Over the past five quarters, Nvidia's revenue has impressively doubled each quarter, with some quarters seeing exponential growth. Despite predictions of a moderate growth slowdown later this year, analysts anticipate a significant 82% revenue increase for the fiscal quarter ending in October, projecting earnings of approximately $329 billion.

The strong demand for Nvidia's GPUs is not only reinforcing its growth outlook but also attracting continued investor interest. As Nvidia continues to execute its product roadmap effectively, there are signs of renewed optimism in the options market, with an increase in call option buys indicating expectations for further stock price appreciation.

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