Nvidia (NVDA) stock rose as much as 5% on Wednesday to hit a record high, giving the company a market value of more than $3 trillion, making it the third stock to reach the milestone, joining Apple (AAPL) and Microsoft (MSFT).
Wednesday's rise also saw the company briefly overtake Apple as the second most valuable company on the US stock market. Microsoft currently holds the top spot.
Wednesday's rise comes amid broader gains in technology stocks, with weak US economic data and lower Treasury yields buoying markets on hopes the Federal Reserve will cut interest rates as early as July.
Nvidia has been the poster child for AI investor enthusiasm, which accelerated with OpenAI's release of ChatGPT in late 2022.
The stock is up more than 140% this year and 200% over the past year. Nvidia shares have risen more than 3,300% in the past five years. During those same periods, the Nasdaq had more modest gains of 14%, 29%, and 126%, respectively.
This week's rise in Nvidia follows an announcement on Sunday from its CEO, Jensen Huang, who said at an industry conference that the company will launch a high-power version of its Blackwell chip — called Blackwell Ultra — in 2025, followed by a new artificial intelligence chip platform, Rubin. , in 2026. The company will launch the Ultra version of Rubin in 2027.
Nvidia is the technology industry's preferred supplier for AI chips and integrated software.
Tech giants, including Amazon (AMZN), Google (GOOG), Meta (META), Microsoft, Tesla (TSLA), and others, use their devices to power everything from cloud-based AI offerings for customers to proprietary AI models them and their solutions. Services.
In the first quarter, Nvidia reported adjusted earnings per share of $6.12 on revenue of $26 billion, an increase of 461% and 262%, respectively, compared to the same period last year.
Nvidia's data center revenue last quarter rose 427% year over year to $22.6 billion, representing 86% of the company's total revenue for the quarter. Nvidia's gaming segment, once its most important business, saw revenue of $2.6 billion.
Nvidia also announced that its stock will undergo a 10-for-1 split on June 7, and the company will raise its dividend from $0.04 per share to $0.10 per share.
But Nvidia isn't the only game in town.
AMD (AMD) and Intel (INTC) are both moving forward with developing their own AI chips with the aim of outperforming Nvidia. AMD recently announced that the MI325X and MI350 will hit the market in 2024 and 2025, respectively, and said that its next-generation MI400 AI accelerator platform will arrive in 2026.
Meanwhile, Intel said its Gaudi 2 and Gaudi 3 AI accelerators will undercut the price of competing chips. With companies spending billions on AI chips, any price savings would certainly be welcome.
Nvidia is also facing increasing competition from its customers, as Amazon, Google and Microsoft seek to wean themselves off their dependence on the company's chips and save on capital expenditures while they're at it.
For now, Nvidia continues to maintain its grip on the AI field, and will do so for the foreseeable future.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @Daniel Holly.
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