Nvidia's market value briefly surpassed $2 trillion, making it over three times more valuable than the next leading semiconductor company. Despite closing 3% below the threshold, a 17% stock surge followed a strong quarterly report, convincing investors of the sustainability of Nvidia's AI boom. With a record close at $788.12, Nvidia joins Microsoft, Apple, and Saudi Aramco in achieving the $2 trillion market cap level, a significant feat for a chip company.
Taiwan Semiconductor Manufacturing, Nvidia's primary chip producer, generates 16% more annual revenue but holds a market cap of around $569 billion. Broadcom, benefiting from AI-driven demand for Ethernet chips, has a market cap just over $605 billion. Nvidia's robust profits, driven by its AI technology lead, support its soaring market value. At $2 trillion, Nvidia's share price trades at 34.4 times Wall Street's projected earnings for the current fiscal year, a 10% decrease from before the strong quarterly report.
This multiple is also nearly half what the stock commanded in May, reflecting the surge in demand for Nvidia's AI systems. Analysts, with optimistic price targets, foresee the share price hitting or exceeding $1,000, anticipating continued strong performance. Stacy Rasgon of Bernstein notes that the company is "printing money" at this point, emphasizing the remarkable trajectory that has propelled Nvidia to the $2 trillion mark.
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