NVIDIA, the AI chipmaker, continues its meteoric rise in the market, surpassing Saudi Aramco to become the third most valuable company globally and in the United States.
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A SANTA CLARA, CALIFORNIA - FEBRUARY 05: A sign is posted at Nvidia headquarters on February 05, 2024 in Santa Clara, California. Shares of Nvidia stock hit record highs on Monday after analysts increased their outlook on company.
Becoming World's 3rd Richest Company
Marking its debut above the $2 trillion threshold, NVIDIA reached a market capitalization of $2.06 trillion. Meanwhile, Saudi Aramco experienced a decline, settling at $2.03 trillion, according to Bloomberg data.
This achievement comes just three weeks after overtaking Alphabet, Google's parent company, for the fourth spot in market value rankings.
NVIDIA joins an exclusive club with a market value exceeding $2 trillion, positioning itself as one of only four companies worldwide to achieve this milestone.
While Microsoft reigns as the sole entity surpassing the $3 trillion mark, NVIDIA's remarkable ascent is driven by its dominant presence in the high-end AI chip sector, where it commands an impressive 80 percent market share.
The surge in NVIDIA's stock price underscores its unparalleled standing in the AI chip market, fueled by soaring demand for its cutting-edge chips that power data centers, crucial for executing complex tasks in AI applications.
Notably, the steadfast demand for NVIDIA's H100 accelerators, especially from key clients such as Microsoft and Meta Platforms.
Also Read: Nvidia Rockets Toward $2 Trillion Valuation, Leads AI Stocks with 59% Surge
Amidst its surge in stock value driven by its exceptional product lineup, NVIDIA's CEO, Jensen Huang, is actively diversifying investments into other AI ventures.
The Motley Fool blog reported that the companies in which NVIDIA is investing include chip designer Arm Holdings, medical AI firm Nano-X Imaging, Recursion Pharmaceuticals focusing on AI-driven drug discovery, self-driving truck company Tusimple Holdings, and AI voice recognition developer SoundHound AI.
Although NVIDIA allocated the largest investment to Arm Holdings, SoundHound AI has shown the most promising growth. Its stock has soared by 180 percent this year, reaching a valuation of $1.5 billion.
Huang elaborated on this during Nvidia's recent earnings call, emphasizing that this approach facilitates the development of customized digital intelligence infrastructure to meet each country's specific requirements.
The concept of sovereign AI has garnered interest beyond the US and China, with nations like Japan, Canada, and France making significant investments in AI capabilities.
By empowering countries to leverage their data and foster domestic innovation, Nvidia seeks to assert its influence in shaping the worldwide AI arena.
Robust Earnings
Nvidia's stock has surged following robust earnings, reinforcing the bullish sentiment among investors regarding the transformative potential of artificial intelligence in reshaping the tech sector.
The company's dominance in providing graphics chips tailored for intricate computing tasks vital for AI applications has propelled its market standing.
This year has seen an unrelenting rally for Nvidia, with the stock soaring by approximately 66%, contributing an impressive $834 billion in market value. In premarket trading on Monday, the stock registered a further uptick of up to 1.8%.
Conversely, Aramco has faced challenges, experiencing a decline of over 5% in its stock value this year. Factors such as reduced production due to OPEC+ cuts and the prospect of a follow-on offering by the Saudi government have exerted downward pressure on the company's shares.
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