NVIDIA is growing strong in the stock market, adding $273 billion to its capitalization in a day of trading. In five years, the company’s stock value has grown 20 times in size, making many employees rich.
The company initially grew by selling video cards for PCs, mostly used for high end gaming. With the supply chain disruption during COVID, the need to restore American manufacturing has been taken seriously by both administrations. AI is now the biggest consumer of chips, explaining NVIDIA’s propelling. AP News says:
Nvidia’s stock price jumped 16% on Thursday, increasing the company’s market value by a staggering $273 billion in just one day, a record amount.
The chipmaker has been seeing soaring demand for its semiconductors, which are used to power artificial intelligence, or AI applications. The company’s revenue more than tripled in the latest quarter compared with the same period a year earlier.
NVIDIA is now at the center of only a few companies powering the S&P500. This is propelling the stock portfolios of many Americans who invest in mutual and exchange traded funds. It is, however, concentrating risk in the economy as a whole. CNBC explains the recent stock movements:
During the regular session, the major averages roared in a rally that was powered by Nvidia. The chipmaker soared 16%, catching a tailwind from winning quarterly results. The S&P 500 added 2.11% for its best day since January 2023, while the Nasdaq Composite popped 2.96% for its best session since February 2023. The tech-heavy index is within striking distance of its closing record of 16,057.44, registered in November 2021. The 30-stock Dow also closed at a record high, gaining 1.18%.
“Blockbuster earnings from tech giant Nvidia sparked the rally, but many sectors contributed,” said Larry Tentarelli, chief technical strategist at the Blue Chip Daily Trend Report. “This is a very constructive breakout.”
AI as a concept is still relatively new, but it is making great strides. 2024 could be the year where AI shows whether it is a passing fad, or has real economic benefits.
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