AI sets NVIDIA on path to become first US chipmaker to be valued over $1 trillion

Nvidia Corp is poised to surpass a market capitalization of $1 trillion, becoming the first U.S. chipmaker to achieve this milestone. In premarket trading, the company’s shares were up by 3.5 per cent at $402.91.

In 2021, Meta (formerly known as Facebook) reached a trillion-dollar market capitalization, while other U.S. companies such as Apple Inc, Alphabet Inc, Microsoft Corp, and Amazon.com Inc are already part of this exclusive club.

Nvidia attracted significant attention in the field of artificial intelligence (AI) after surpassing analysts’ expectations with its revenue forecast last week, exceeding them by over 50 per cent.

Financial analysts on Wall Street described Nvidia’s forecast as “unfathomable” and “cosmological,” leading to a wave of price target increases. The highest price target estimated the company’s value at approximately $1.6 trillion, aligning with Google-parent Alphabet.

The surge in Nvidia’s shares, which increased by about 25 per cent last week, sparked a rally in AI-related stocks and provided a boost to other chipmakers. As a result, the Philadelphia SE Semiconductor index closed on Friday at its highest level in over a year.

The success of OpenAI-owned ChatGPT, which includes rapid advancements in generative AI capable of engaging in human-like conversations and creating various forms of content such as jokes and poetry, has prompted tech giants like Alphabet and Microsoft to explore and leverage the potential of this technology.

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