Microchip maker Nvidia Corp. was poised to join an exclusive list of companies worth more than $1 trillion on Thursday as the company said that feverish demand for AI technology was causing booming demand for its products.
The chip designer’s shares — which have already doubled in value this year — jumped by another 25 per cent on Wall Street on Thursday after the company said it is seeing unprecedented demand in just about every facet of its business.
The company’s shares were worth $305 apiece on Wednesday, enough to value the company at more than $750 million US. At one point on Thursday morning they topped $400, enough to value the company at more than $1 trillion US.
Prior to Thursday, only four American companies were in that exclusive club: Apple, Microsoft, Google parent Alphabet and Amazon. Meta and Tesla had previously achieved the feat, but both companies have fallen off dramatically since last year.
If the company manages to hold on to a market gain of at least $210 billion until the end of the day, it would mark the biggest one-day increase in value for a U.S. company ever.
And it’s all happening because the company revealed late on Wednesday that it’s on track to beat Wall Street forecasts for its revenue by at least 50 per cent. The company expects to book $11 billion in revenue this quarter, well above the $7 billion that analysts were anticipating.
CEO Jensen Huang said demand for chips is strong in its existing businesses, but also emerging in new ones tied to AI.
“A trillion dollars of installed global data centre infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process ” Huang said.
“We are significantly increasing our supply to meet surging demand for them,” he said.
Robert Schiffman, an analyst with Bloomberg Intelligence, said that chips for gaming were for a long time the company’s biggest driver of demand, but that market has tailed off. Now the surge in demand for AI-related chips is causing the company’s data centre business to boom.
All in all, the company is now on track to take in $35 billion US in revenue next year, which would be an all time record high.