https://www.reuters.com/technology/nvidia-close-becoming-first-trillion-dollar-chip-firm-after-stellar-forecast-2023-05-25/ Skip to main content Exclusive news, data and analytics for financial market professionals Learn more aboutRefinitiv Reuters home * World * Business * Markets * Sustainability * Legal * Breakingviews * Technology * Investigations * More My View Register * * * * * * * * * Technology Chip giant Nvidia nears trillion-dollar status on AI bet By Aditya Soni May 25, 20239:45 PM UTCUpdated ago * Summary * Companies * Chip designer's stock hits all-time high * Rally lifts stock markets from Japan to Europe * * * * * * * * May 25 (Reuters) - Nvidia Corp (NVDA.O) surged 24% on Thursday in one of the largest one-day gains in value for a U.S. stock, after its stellar revenue forecast showed that Wall Street has yet to price in the game-changing potential of AI. The surge more than doubled the stock's value for this year and increased the chip designer's market capitalization by about $184 billion to nearly $939 billion. That makes Nvidia twice as big as the second-largest chip firm, Taiwan's TSMC (2330.TW). In the United States, it trails only trillion-dollar-value companies Apple Inc (AAPL.O), Alphabet Inc (GOOGL.O), Microsoft Corp (MSFT.O) and Amazon.com Inc (AMZN.O). Reuters Graphics Reuters Graphics The rosy earnings also sparked a rally in the chip sector and for AI-focused firms, lifting stock markets from Japan to Europe. In the U.S., Big Tech companies other than Amazon closed between 0.6% and 3.8% higher, while Advanced Micro Devices Inc (AMD.O) settled 11% higher. Analysts rushed to raise their price targets on Nvidia stock, with 27 lifting their view on the idea that all roads in AI lead to the company as it dominates the market for chips used to power ChatGPT and many similar services. The mean price target has more than doubled this year. At the highest view, a $644.80 price target from Elazar Advisors, Nvidia will have a value of $1.59 trillion, around that of Alphabet. Foxconn to use Nvidia chips to build self-driving platforms The logo of NVIDIA as seen at its corporate headquarters in Santa Clara, California, in May of 2022. Courtesy NVIDIA/Handout via REUTERS "In the 15+ years we have been doing this job, we have never seen a guide like the one Nvidia just put up with the second-quarter outlook that was by all accounts cosmological, and which annihilated expectations," Stacy Rasgon of Bernstein said. Nvidia, the fifth-most valuable U.S. company, on Wednesday projected quarterly revenue more than 50% above the average Wall Street estimate and said it would have more supply of AI chips in the second half to meet a surge in demand. CEO Jensen Huang said $1 trillion worth of current equipment in data centers would have to be replaced with AI chips, as generative AI is applied into every product and service. The results bode well for Big Tech companies, which have shifted focus to AI on hopes the technology would help attract demand at a time their profit engines of digital advertising and cloud computing are under pressure from a weak economy. Some analysts said Nvidia's results show that the generative AI boom could be the next big driver of growth. "We're really just seeing the tip of the iceberg. This really could be another inflection point in technological history, such as the internal combustion engine - or the internet," said Derren Nathan, head of equity analysis at Hargreaves Lansdown. Nvidia hits record high after upbeat forecast Nvidia hits record high after upbeat forecast Reporting by Aditya Soni and Chavi Mehta in Bengaluru, additional reporting by Tiyashi Datta; Editing by Rashmi Aich and Shounak Dasgupta * * * * * Our Standards: The Thomson Reuters Trust Principles. Read Next * OpenAI CEO Sam Altman FOCUSOpenAI CEO's threat to quit EU draws lawmaker backlash5:25 PM UTC * The logo of technology company Nvidia is seen at its headquarters in Santa Clara EXPLAINERExplainer: Why are Nvidia's shares soaring and what is its role in the AI boom?8:42 PM UTC * Virgin Galactic's passenger rocket plane VSS Unity is towed after reaching the edge of space above Spaceport America SpacecategoryVirgin Galactic makes key spaceflight test before starting commercial service5:39 PM UTC * 'Oversight of A.I.: Rules for Artificial Intelligence' Subcommittee hearing in Washington Future of MoneycategoryOpenAI's Sam Altman raises $115 mln for Worldcoin crypto project4:03 PM UTC Refinitiv Workspace More from Reuters Technology * Illustration shows representations of virtual cryptocurrencies Blockchain.com CEO says US default would hit crypto initially Future of Moneycategory * May 25, 2023 * 2:31 PM UTC A U.S. government default would trigger an initial pull-back from crypto currencies followed by a "push upward" the CEO of London-based crypto firm Blockchain.com said on Thursday. * Illustration shows OpenAI and ChatGPT logos TechnologycategoryCanada to launch probe into OpenAI over privacy concerns5:43 PM UTC * Illustration shows NVIDIA logo TechnologycategorySemiconductor index surges with Nvidia leading race to AI "gold rush"5:52 PM UTC * Twitter corporate headquarters building in San Francisco, California TechnologycategoryTwitter likely to quit EU code against disinformation, EU official says6:01 PM UTC * Illustration picture of semiconductor chips TechnologycategorySenators urge Commerce to prioritize national security in chips funding4:30 PM UTC Site Index Browse * World * Business * Legal * Markets * Breakingviews * Technology * Investigations, opens new tab * Lifestyle About Reuters * About Reuters, opens new tab * Careers, opens new tab * Reuters News Agency, opens new tab * Brand Attribution Guidelines, opens new tab * Reuters Leadership, opens new tab * Reuters Fact Check, opens new tab * Reuters Diversity Report, opens new tab Stay Informed * Download the App, opens new tab * Newsletters, opens new tab Information you can trust Reuters, the news and media division of Thomson Reuters, is the world's largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. Follow Us * * * * * Thomson Reuters Products * Westlaw, opens new tab Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. * Onesource, opens new tab The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. * Checkpoint, opens new tab The industry leader for online information for tax, accounting and finance professionals. Refinitiv Products * Refinitiv Workspace, opens new tab Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. * Refinitiv Data Catalogue, opens new tab Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. * Refinitiv World-Check, opens new tab Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. * Advertise With Us, opens new tab * Advertising Guidelines, opens new tab * Coupons, opens new tab * Cookies, opens new tab * Terms of Use, opens new tab * Privacy, opens new tab * Digital Accessibility, opens new tab * Corrections, opens new tab * Site Feedback, opens new tab All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays. (c) 2023 Reuters. All rights reserved