Nvidia Becomes First Company to Surpass $5 Trillion Market Cap Worldwide... Stock Soars on AI Optimism
Optimism Over AI Innovation and Profitability Outweighs Bubble Concerns
Nvidia, the superstar of artificial intelligence (AI), has become the first company in the world to surpass a market capitalization of 5 trillion dollars. Despite concerns about an AI bubble, optimism is spreading that the company’s innovation and profitability will be sustained, driving its stock price sharply higher.
On October 29 (local time) at the New York Stock Exchange, Nvidia’s stock price rose by 4.45% from the previous day to reach 209.97 dollars per share as of 9:55 a.m., pushing its intraday market capitalization past 5 trillion dollars. Nvidia’s stock price has surged more than 50% so far this year alone.
This explosive rise in stock price is fueled by strong expectations that AI innovation and profitability will continue.
Jensen Huang, CEO of Nvidia, announced at a developer event (GTC) held in Washington, D.C. the previous day that orders for AI chips are expected to generate 500 billion dollars in revenue over the next several quarters. He also revealed plans to work with the U.S. Department of Energy to help build seven AI computers. The systems Nvidia is building will be used for core government research in the energy sector. In addition, Nvidia will invest 1 billion dollars in Nokia, the Finnish telecommunications equipment company, and form a strategic partnership to develop next-generation 6th generation (6G) mobile communication technology.
Regarding the collaboration between Nvidia and Nokia, Keith Buchanan, Senior Portfolio Manager at Globalt Investments, commented that this “shows the direction of the earnings story” in the AI industry, adding, “We have entered the next phase of the AI story. Rather than focusing solely on earnings, we are now watching the acceleration of growth that these companies are projecting.”
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As a result, Nvidia’s stock price rose by 4.98% the previous day, surpassing 200 dollars per share for the first time ever, and continued its rally with an early-session surge of nearly 5% on this day, making history by reaching a market capitalization of 5 trillion dollars.
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