Nvidia Corp. (NVDA.O) is on track to become the first trillion-dollar chipmaker. The $1 trillion gaming and AI chip business saw its shares rise 4.4% before the bell on Tuesday. Taiwan Semiconductor Manufacturing Co Ltd (2330. TW) is worth $535 billion.
Apple Inc (AAPL.O), Alphabet Inc (GOOGL.O), Microsoft Corp (MSFT.O), and Amazon.com Inc (AMZN.O) joined Meta Platforms Inc (META.O) in 2021 to reach the trillion-dollar market capitalization milestone.
Wall Street analysts raised their price targets in droves after Nvidia’s “unfathomable” and “cosmological” prediction. Google-parent Alphabet’s highest price objective was $1.6 trillion.
“Given the valuation is well above the long-term average, there will be significant pressure to deliver high growth on a consistent basis… there could be volatility in its share price to come,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Nvidia’s sales projection last week surprised investors by more than 50%, putting AI in the spotlight.
Great Hill Capital chairman Thomas Hayes called Nvidia the AI poster child. “The market is deciding if AI is real.”
Last week, Nvidia’s shares soared 25%, boosting AI-related stocks and chipmakers, enabling the Philadelphia SE Semiconductor index (.SOX) to close at its best in almost a year. In addition, alphabet and Microsoft are using generative AI, which can talk like humans and write poetry and humor, after ChatGPT’s success.
