Shares of Nvidia closed up 24% on Thursday on the back of an outsized earnings report that beat consensus estimates, hitting a record high.
Nvidia’s previous all-time high was in November 2021, when the stock price closed above $333. The shares opened Thursday at $385 and returned some of the gains overnight.
To put its gain into perspective, Nvidia stock is up 235% since hitting a two-year low of $112 on Oct. 14, beating the performance of any other S&P 500 company since then. Meta is the second best performing stock with a 97% gain over the same period.
The chipmaker’s market capitalization was on course to open at $975 billion after a 30% jump in after-hours trading on Wednesday. The company reported first-quarter adjusted earnings per share of $1.09, versus Refinitiv’s consensus estimate of 92 cents. Its first-quarter revenue of $7.19 billion was significantly higher than a consensus estimate of $6.52 billion.
But it’s the chipmaker’s leading position as an AI chip supplier, coupled with sales of $11 billion in the current period, that may have pushed shares higher still.
The rise in share price puts Nvidia within reach of a trillion-dollar valuation, something only a handful of publicly traded companies have ever achieved. Apple was first valued at $1 trillion in 2018 and reached a valuation of $3 trillion in 2022. Alphabet, AmazonSaudi Arabia, You’re here, Meta And Microsoft have all at some point been valued at $1 trillion or more.
Jensen Huang, Chairman and CEO of Nvidia, speaks during the company’s event at the 2019 Consumer Electronics Show in Las Vegas on January 6, 2019.
David Paul Morris | Bloomberg | Getty Images
Analysts quickly raised Nvidia’s price targets after the company released its results. JPMorgan doubled its price target from $250 to $500 and reiterated its overweight rating. “Generative AI and large language/transformer models are driving demand acceleration,” said JPMorgan analyst Harlan Sur.
“What can we say other than WOW,” Evercore analyst CJ Muse wrote in a Wednesday note. Evercore raised its price target from $320 to $500 and reiterated its outperform rating.
However, Nvidia’s meteoric rise in valuation does not lift other chipmakers. The AI chip craze has been fueled by demand for high-powered graphics processing units, or GPUs. The company has been a historical outperformer in the high-performance “discrete” GPU market, especially when compared to Intel.
Shares of Nvidia significantly outperformed stock prices of Intel and AMD.
But neither Intel, which has reportedly struggled to manage inventory issues and recently made major cost cuts, nor AMD was able to achieve the same level of share price growth as Nvidia. Intel shares are up nearly 10% year-to-date as of Wednesday’s market close; AMD shares are up 67% over the same period.
Nvidia shares are now up 160.6% year-to-date.
– CNBC’s Michael Bloom, Robert Hum and Kif Leswing contributed to this report.
Correction: This story has been updated to reflect that Nvidia shares are expected to close at a record high on Thursday. A previous version incorrectly indicated the day.