Nvidia has a seen a massive increase in its stock price following the Wednesday’s first quarterly report for the 2023-24 financial year. The jump in the price comes after the company announced its results and claimed that it can feed the demand for AI chips created by the sudden rise in generative AI technologies.
At the time of writing, Nvidia's shares sit at $383, up from $308 last night, giving investors a hefty 22 percent return in a day. The speedy rise in the price of Nvidia's share also gives the chip maker a chance to become the fifth publicly traded US company to join the elite $1 Trillion club.
With the boom in the share price, Nvidia has added $185 Billion to its market capital, which is more than Intel's total market capitalization. Unfortunately, while Nvidia has been enjoying the moment, Intel has lost more than 5 percent of the share price during the first half of trading.
Nvidia is not the only company that is benefiting from the generative AI wave. Taiwanese chipmaker TSMC also saw gains following Nvidia's positive result. Not only that, Nvidia's good news has done wonders for AMD who saw a massive 13 percent jump in the share price following Nvidia's quarterly financial report last night.
However, the jump in Nvidia's price had a negative impact on the short sellers. According to a Bloomberg report (Paywall), the spike in Nvidia's stock price has made a $2.3 Billion hole for those betting against the chip marker. This also bought Nvidia's notional short interest value (the amount of money short sellers have bet on Nvidia's decline) to $9 Billion, making it the "fourth most-shorted stock in the US, behind only Apple Inc., Tesla Inc. and Microsoft Corp. "
Currently, analyst believe that this is now Nvidia's game to loose. Geoff Blaber, chief executive of CCS Insight, noted the following:
We are obviously seeing a huge spike in AI demand and Nvidia is at the very front line of that. They are without doubt in pole position because they provide a very comprehensive toolchain that no other company is able to currently.
Nvidia has seen fluctuations in the past as the company went through various technological trends like the boom in crypto mining and autonomous driving. During the investors call, Jensen Huang, CEO of Nvidia noted that the company is reaping the benefits of being the first one to invest in the various AI technologies.
When generative AI came along, it triggered a killer app for this computing platform that’s been in preparation for some time. With generative AI becoming the primary workload of most of the world’s data centres generating information, it is very clear now that . . . the budget of a data centre will shift very dramatically towards accelerated computing, and you’re seeing that now.
It will be interesting to see if Nvidia can sustain this sudden rise in the share price. As things stand, the company may become the first chip maker to join Apple, Microsoft, Alphabet and Amazon in the Trillion dollar club. Nvidia's market capitalization stands at $985 Billion at the time of writing this article.
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