Hours after eclipsing Google-parent Alphabet to become the third most valuable Wall Street company, shares of Nvidia Corp are fast approaching the $2 trillion-mark. The artificial intelligence (AI) chipmaker’s stock rose 2.46 per cent, putting its value at $1.825 trillion, while Alphabet’s stock climbed 0.55 per cent, leaving it with a value of $1.821 trillion.
Nvidia has been a top beneficiary of technology companies’ race to build AI into their products and services, and the latest gain in its stock came a day after it ended a session with a market capitalization above Amazon’s for the first time in two decades.
Several well-known funds jumped into shares of chipmaker Nvidia at the end of last year, securities filings showed on Wednesday, potentially setting themselves up to benefit from the nearly 50 per cent gain the stock has notched so far in 2024.
Nvidia controls about 80 per cent of the high-end AI chip market, a position that has boosted its stock price this year after it more than tripled in 2023. In 2017, Jensen Huang, founder and CEO of Nvidia, was worth $2.7 billion. In 2023, he had a net worth of $21.1 billion. Right now, with Nvidia’s nearly 50 per cent rally so far this year, he is worth $65.3 billion.
Customers face shortages of Nvidia’s top-of-the-line components while AI developers face months-long waiting lists to use its processors through cloud-computing providers. Technology-related companies, including Microsoft and Meta Platforms, have also rallied to record highs on AI optimism.
Also Read: Nvidia overtakes Alphabet to become third most valuable US company
Nvidia will release its quarterly earnings results on February 21. Analysts, on average, see the company’s January fiscal quarter revenue more than tripling to $20.37 billion, fueled by demand for its top-shelf AI chips, according to LSEG data. Analysts see its adjusted net profit surging more than 400 per cent to $11.38 billion.
AI firms surge after Nvidia discloses stake
Shares of smaller AI firms rallied on Thursday after the world’s most dominant artificial intelligence chipmaker, Nvidia, disclosed stake in them, offering clues on its growth strategy. The rally showed Nvidia’s growing influence in the AI world as its market value grows at a scorching pace, making it the third most-valuable US company.Â
Nvidia’s largest investment of $147.3 million was in Arm Holdings, the chip designer that Nvidia failed to buy after the $80 billion deal hit the antitrust hurdle two years ago. The chip giant had indicated interest in purchasing shares of Arm during the British company’s Nasdaq debut last year. Shares of Arm were up nearly four per cent.
Nvidia disclosed its stakes as of December 31 in a 13F filing late on Wednesday. The regulatory disclosure is closely watched by investors and is generally associated with moves made by fund managers rather than public companies, according to news agency Reuters.
Shares of biotech firm Recursion Pharmaceuticals, in which Nvidia invested nearly $76 million, gained 12.7 per cent. Last year, Nvidia had said it would invest in Recursion to speed up training of the Salt Lake City, Utah-based firm’s AI models for drug discovery.
Nvidia also bought stake in Israel-based medical device company Nano-X Imaging, which uses AI software to analyze reports. Nano-X shares rose 80 per cent higher. Autonomous driving technology TuSimple Holdings, which delisted from the Nasdaq last week, drew $3 million in capital from the chipmaker.
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Published: 15 Feb 2024, 08:53 PM IST