Nvidia Hits $1tn Valuation, Leads In AI

Nvidia is worth $1tn, making it the first chipmaker to achieve this. The company's shares rose on Tuesday due to an expected increase in demand for its products for AI.

On Tuesday, the gaming and AI chip company's shares went up by 4.2% in early trading. They were able to reach an important milestone.

Last Thursday, the company's value went up by 25% to $940bn. This happened after they released a forecast that predicted revenues of $11bn for July. This is more than the predicted $7.2bn from Wall Street.

Experts in Wall Street think Nvidia’s prediction is extremely hard to understand and beyond our understanding of the universe. As a result, they raised their predicted price for the company in great numbers.

Many companies want to use AI in their businesses. Some experts say this might lead to a bubble. Also, chip companies are affected by political issues between the US and China. They can't export semiconductors as easily as before.

The AI craze helps companies like Nvidia make lots of money. They sell the equipment needed to process big data inputs. AI involves complex models with billions of inputs.

Nvidia had a tough year in 2022. Demand for their graphics chips decreased, and they couldn't acquire Arm from SoftBank. The regulators stopped the deal.

This year, the company's share price has doubled due to excitement over generative AI products. These products need large data centers with lots of semiconductor chips.

Nvidia has joined some big US companies. They're worth $1tn or more. Some of these companies are Apple, Amazon, Microsoft, and Alphabet. Another company called Meta used to be worth $1tn, but they're worth less now. They own Facebook, Instagram, and WhatsApp. They're worth about $670bn right now.

Thomas Hayes, the chair of Great Hill Capital, said Nvidia is leading the way in the AI industry. He also mentioned that the market is realizing the potential of this trend.

ChatGPT, which is owned by OpenAI, has been very successful. This success has inspired Alphabet and Microsoft to use generative AI. This kind of AI can have conversations that sound like humans and can even make jokes and poetry.