Nvidia value rockets by £150bn in a day
CHIP manufacturer Nvidia has clocked up one of the biggest ever one-day stock market increases in value in US company history as it cashes in on the artificial intelligence boom.
Shares in the US giant jumped 24pc on Wall Street yesterday – adding more than £150bn to its market cap.
The gain was close to the total value of Shell, the second largest firm on the UK stock market, and left Nvidia valued at around £760bn.
The surge came after the Californian firm said sales would hit £9bn in the three months to July, smashing Wall Street estimates and sending shares into a frenzy. Chief executive Jensen Huang said it was in the right place at the right time when artificial intelligence (AI) and ChatGPT took off, allowing it to take advantage of the major investment being pumped into the technology.
‘When generative AI came along, it triggered a killer app for this computing platform that’s been in preparation for some time,’ he said.
Nvidia has played a key role in the growing popularity of AI, providing chips to the likes of Microsoft to develop the tech. Geoff Blaber, the chief executive of CCS Insight, a tech consultancy, said: ‘We are obviously seeing a huge spike in AI demand and Nvidia is at the very front line of that.’
But its share price rally has also had a knock-on effect for several US and Japanese equipment suppliers to chipmakers, with shares in Tokyo-based Advantest, Applied Materials and Lam Research making significant gains.
Alphabet and Microsoft, which have invested billions of dollars in AI, also climbed a respective 2.3pc and 3.9pc.
And the news could fuel further excitement for the upcoming listing of British chipmaker Arm.
‘Nvidia’s growth is a huge shot in the arm for Arm’s listing as this AI arms race takes hold. This is the gold rush and investors will be laser-focused on this dynamic for Arm,’ said Dan Ives, analyst at Wedbush Securities. He added that the latest update was a ‘game changer’ for the industry, potentially boosting the upcoming valuation of Arm.
Nvidia offered to buy Arm back in 2020 but failed to get the deal over the line after regulatory concerns. Arm is now planning to list in New York after snubbing a dual listing in the UK.
The record for a one-day jump in value was Apple in November 2022, when it rose by £155bn. Nvidia is now on the cusp of becoming the first chip firm to have a $1trillion market cap, putting it alongside Apple, Microsoft, Alphabet and Amazon.