Nvidia set to top $2T valuation
The gain will cement the chipmaker's position as the world's 4th-most valuable company
Santa Clara-based Nvidia Corp. is set to become the first semiconductor firm with a $2 trillion valuation, another milestone in its ascendancy as the biggest beneficiary of a rush into artificial intelligence-related stocks over the past year.
The chipmaker's shares rose as much as 2.8% on Friday, closing at a $1.97 trillion valuation. The gain cements Nvidia's position as the world's fourth-most valuable company after rallying 59% since the beginning of the year, with a market capitalization that's only behind those of Microsoft Corp., Apple Inc. and Saudi Aramco.
Nvidia shares surged after it reported blowout results that reaffirmed Wall Street bets on the potential for its artificial intelligence technologies. The chipmaker also gave guidance above expectations, driven by AI spending at its biggest customers, including Meta Platforms Inc.
Nvidia dominates the market for graphics chips designed for complex computing tasks needed to power AI applications that companies are rushing to develop.
The company's renewed rally has put its chief executive, Jensen Huang, on the verge of his own breakthrough: becoming one of the 20 richest people in the world.
Huang's wealth jumped $9.6 billion to $69.2 billion Thursday, a gain that leapfrogged him ahead of Charles Koch and Chinese bottled-water tycoon Zhong Shanshan to 21st place on the Bloomberg Billionaires Index. It's a remarkable rise for the co-founder of the semiconductor company, who was ranked 128th with a net worth of $13.5 billion as recently as early last year. all the makings of a market bubble about to pop. The chipmaker is the third-largest US short with $18.3 billion of shares that have been borrowed and sold, according to S3.
“The early mark-to-market losses were inescapable for many short sellers that were looking to trim their positions after NVDA's earnings report,” Ihor Dusaniwsky, managing director of predictive analytics at S3, wrote in the note. “Short sellers will probably wait a bit to look for more favorable exit points.”
The rally in Nvidia sparked broader gains across the US chip industry. Short sellers had a oneday paper loss of $4.3 billion from semiconductor stocks, S3 data showed. Semiconductors are the worst-performing sector for short sellers this year, with mark-tomarket losses of $7.2 billion in February.
Some investors say Nvidia's blockbuster earnings will cement optimism that AI spending is strong, justifying the big stock market gains.