Financial data firm S3 Partners Tuesday said short sellers in shares of Nvidia Corp. were down $4.1 billion in mark-to-market losses over the past three trading sessions.
The world’s most valuable chipmaker after the close last Wednesday released its quarterly results and forecast second-quarter revenue more than 50% above Wall Street estimates. Including Tuesday’s gains, Nvidia’s shares are up about 35% since Wednesday and about 180% for the year to date.
Nvidia shares Tuesday jumped 4.2% to a record, as the world’s most valuable chipmaker breached $1 trillion in market capitalization for the first time.
The gaming and AI chip company, whose shares rose 3.8% in trading before the bell on Tuesday, was valued at $1.03 trillion. AI took center stage after Nvidia stunned investors by reporting a quarterly profit of more than $2 billion and revenue of $7 billion, both exceeding Wall Street expectations.
Wall Street analysts called Nvidia’s forecast “unfathomable” and “cosmological”, hiking their price targets in droves. The highest price target valued the company at about $1.6 trillion, on par with Google-parent Alphabet.
Nvidia’s shares rose about 25% last week sparking a rally in AI-related stocks and boosted other chipmakers, helping the Philadelphia SE Semiconductor index close on Friday at its highest in over a year.
Nvidia was co-founded in 1993 by Jensen Huang. It proved more successful than its peers at developing chips that turn computer code into the realistic images that computer gamers love, and rode out a wave of consolidation that saw its rivals acquired, bankrupted or merged into larger companies.
Under Huang, the company then pushed its technology into new markets, such as data center servers and artificial intelligence processing — a move that’s proving prescient today. In less than a decade, Nvidia’s data center business has grown from $300 million in annual revenue to $15 billion. The chipmaker has won orders to equip giant computing factories by successfully arguing that graphics chips can handle AI workloads better than more standard processors.
Separately, the Nasdaq led gains among Wall Street’s main indexes on Tuesday, boosted by shares of Nvidia, amid cautious optimism about lawmakers tentatively agreeing to raise the nation’s debt limit to avert a default.
The S&P 500 index hovered near its highest level since August 2022, well above 4,200 points.
At 12:22 p.m. ET, the Dow Jones Industrial Average was down 117.43 points, or 0.35%, at 32,975.91, the S&P 500 was up 3.47 points, or 0.08%, at 4,208.92 and the Nasdaq Composite was up 68.09 points, or 0.52%, at 13,043.78.
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Updated: 30 May 2023, 10:59 PM IST