Nvidia Momentarily Enters The $1 Trillion Club As a Result of AI Demand

As demand for AI technology has increased, Nvidia share prices have more than quadrupled since October of last year.

NVIDIA stock price. Source: TradingView

Nvidia, a producer of computer chips, momentarily joined the select group of firms with a $1 trillion market capitalization when the demand for artificial intelligence (AI) technology peaked. The computer processor and graphics card manufacturer reached the milestone on May 30 during American morning market hours, when its shares reached a day high of almost $418 according to Google Finance data.

Nvidia's market worth is at $992 million, and its shares completed the day at slightly over $401. Only four firms in the United States are valued at more than $1 trillion: Google's parent company Alphabet, Apple, Microsoft, and Amazon. Due to the surging demand for graphics processing units (GPUs) that drive generative AI technologies, Nvidia has experienced a year-to-date rise of over 180%. In a May 30 Reuters article, experts said that Nvidia presently produces 80% of these GPUs.

Although some could see Nvidia's recent burst price movement as a sign of an overbought market, other experts believe that the AI boom may just be getting started and that there is still plenty of potential for Nvidia to develop. "Technical traders and AI frenzy have moved Nvidia to the $1 trillion cap, and it is not cheap," stated Jim Kelleher, an analyst at Argus Research.

Nvidia Releases an AI Supercomputer to Develop ChatGPT Replacements

In its efforts to commercialize AI-ready semiconductors, Nvidia is not acting alone. According to reports, Microsoft is also creating its own AI processor to support both internal research and apps for Sam Altman's OpenAI. According to a source familiar with the situation, Elon Musk, the former CEO of Twitter, bought thousands of general processing units in April for a future Twitter AI project. Chinese developers are figuring out methods to get past restrictions that prevent the most recent Nvidia processors from being purchased domestically, while tech giants and chipmakers in the U.S. are rushing to catch up on everything AI.

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