Nvidia, based in Santa Clara, California, witnessed a remarkable surge in its stock market value on Thursday, adding a staggering £277 billion after the chipmaker’s quarterly report surpassed expectations.
This marked the largest one-day gain in Wall Street’s history, igniting a rally driven by optimism surrounding artificial intelligence.
Following the impressive quarterly report, Nvidia’s stock surged by 16.4%, reaching a record-high closing price of £785.38.
This propelled its market capitalization to £1.96 trillion as demand for its specialised chips used in AI computing continued to outstrip analysts’ already lofty projections.
The positive results from Nvidia further fuelled a global surge in technology stocks associated with AI, driving the S&P 500, Europe’s STOXX 600, and Japan’s Nikkei share average to unprecedented highs.
Trading activity was robust, with Nvidia’s shares worth £65 billion changing hands, accounting for almost a fifth of all trading in S&P 500 stocks on Thursday.
This historic one-day increase in stock market value eclipsed previous records, notably surpassing Meta Platforms’ £196 billion gain on Feb. 2.
Nvidia’s market value surge on Thursday exceeded the total value of Coca-Cola, standing at £265 billion, solidifying its position as the third-most valuable company in the U.S. stock market, surpassing tech giants Amazon.com and Alphabet.
The company’s stock has enjoyed a remarkable ascent in 2024, climbing by 58%, contributing significantly to the overall increase in the S&P 500.
Russ Mould, investment director at AJ Bell, likened Nvidia’s role in the tech revolution to that of suppliers during the gold rush.
The surge in demand for Nvidia’s chips, driven by companies seeking to bolster their AI capabilities, led the Silicon Valley firm to forecast a staggering 233% growth in current-quarter revenue, surpassing market expectations.
Other chipmakers with exposure to AI also experienced significant gains, with Advanced Micro Devices jumping about 11% and Broadcom adding 6.3%.
The Philadelphia chip index rallied 4.97% to a record high, marking its largest one-day gain since May 2023.
However, concerns lingered among analysts regarding potential revenue growth challenges due to U.S. restrictions on chip sales to China.
Despite these concerns, many investors remain bullish on Nvidia’s future prospects, with several brokerages raising their price targets post-results.