Global AI chip leader Nvidia saw its stock price surge 16.40% on Thursday, reaching a new all-time high and pushing its market value close to $2 trillion. This also led to a global stock market rally and propelled Huang Renxun to become the 21st richest person in the world.
(Previous summary: Nvidia’s financial report reveals a 265% YoY increase in revenue, surpassing expectations. Nvidia’s stock price surged 9% after-hours, and AI concept currencies such as TAO, RNDR, and AGIX also rose.)
(Background: Nvidia’s stock price closed at $693! It has soared 43% this year, and analysts have revised their target price to $800.)
After the market closed on January 21, global AI chip leader Nvidia announced its fourth-quarter financial report for 2023, which showed a YoY revenue increase of 265% to $22.1 billion, far exceeding market expectations. Its net profit reached $12.29 billion, a 769% surge compared to the same quarter last year, when it was $1.41 billion.
Nvidia even predicted that its first-quarter revenue this year would reach $24 billion, exceeding market expectations of $22 billion. This means that Nvidia’s Q1 revenue is expected to more than double compared to the same quarter last year, indicating that the AI boom continues.
Nvidia’s soaring stock price boosts global stock markets
Inspired by these results, Nvidia’s stock price surged $110.66 or 16.40% on Thursday, closing at $785.38, once again reaching a new all-time high. Its market value increased by about $277 billion in a single day, reaching a total market value of $1.9635 trillion, firmly establishing itself as the third-largest company in the US stock market.
Source: Yahoo Finance
With Nvidia’s skyrocketing stock price, the US stock market soared on Thursday. The Dow Jones Industrial Average closed above 39,000 points for the first time, and the S&P 500 had its best single-day performance in 13 months. The Nasdaq Composite Index achieved its best performance since February last year, approaching the historical high set in November 2021:
The Dow Jones Industrial Average rose 456.87 points or 1.18% to close at 39,069.11 points.
The Nasdaq Composite Index rose 460.75 points or 2.96% to close at 16,041.62 points.
The S&P 500 Index rose 105.23 points or 2.11% to close at 5,087.03 points.
The Philadelphia Semiconductor Index rose 221.01 points or 4.97% to close at 4,667.37 points.
Source: finviz
In addition, Nvidia’s impressive financial report also boosted global stock markets:
The European Stoxx 600 Index rose 0.8% to 495.1 points, reaching a new all-time high.
The Nikkei Index surged 2.2% at the close yesterday, reaching 39,098.68 points, breaking the historical record set in 1989. It continued to rise by over 2% during trading today.
Taiwan’s stock market also briefly exceeded 19,000 points and reached a new all-time high.
Huang Renxun believes AI development has reached a tipping point
With Nvidia’s soaring stock price, Huang Renxun, the CEO of Nvidia, saw his personal wealth increase by $9.6 billion to $69.2 billion in a single day, making him the 21st richest person in the world, surpassing Charles Koch, the founder of Koch Industries, and Chinese bottled water tycoon Zhong Shanshan.
Looking ahead, Huang Renxun stated during the financial conference on January 21 that the overall environment is extremely favorable, and the company’s operations are expected to continue growing until after 2025. The demand for Nvidia’s GPUs remains strong, driven by the rise of generative AI and the industry’s overall shift from CPUs to accelerators manufactured by Nvidia.
Joseph Moore, an analyst at Morgan Stanley, stated that Nvidia’s financial report exceeded investor expectations. While Nvidia had never had a single-quarter revenue growth expectation of over $2 billion in the past, this has become the norm during the AI boom, and the demand for AI remains strong.
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