Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
Nvidia Corp briefly joined an elite club of US companies sporting a $1 trillion market value on Tuesday, as investors piled into the chipmaker that has quickly become one of the biggest winners of the AI boom, reports Reuters.
The stock's value has tripled in less than eight months, reflecting the surge in interest in artificial intelligence following rapid advances in generative AI, which can engage in human-like conversation and craft everything from jokes to poetry.
Nvidia has gained about 200 per cent since October, far outpacing any other member of the broad-market S&P 500 index. The rally has propelled its valuation past its peers, but some analysts say the AI boom means the stock should still be worth more.
Its shares closed 3% higher at $401.11 on Tuesday, just a hair's breadth away from the $1 trillion valuation mark after hitting that level in intraday trading. Just four other US companies currently have a valuation of more than $1 trillion - Apple Inc, Alphabet Inc, Microsoft Corp and Amazon.com Inc.
"We view Nvidia as the most important company on the planet in an era that is rapidly changing towards one that will be emphasized by greater AI capabilities," CFRA Research analyst Angelo Zino said.
The latest surge furthers a rally from last week, which was jump-started by a revenue forecast that surpassed the mean Wall Street estimate by more than 50 per cent, which some analysts called "unfathomable" and "cosmological."
The highest price target values the company at about $1.6 trillion, on par with Google-parent Alphabet.
Nvidia's forward price-to-earnings multiple (P/E), a common benchmark for valuing stocks, is 47.23. The figure is significantly above that of peers Qualcomm and Intel and also tops the sector median of 18.09, according to Refinitiv data.
"While the company's valuation looks lofty at the moment, we think Nvidia has the earnings firepower as the adoption of its AI GPU remains in the very early innings," Kinngai Chan, senior research analyst at Summit Insights Group, said.