© Reuters. FILE PHOTO: The logo of NVIDIA as seen at its corporate headquarters in Santa Clara, California, in May of 2022. Courtesy NVIDIA/Handout via REUTERS
(Reuters) – Nvidia (NASDAQ:) Corp is close to breaching $1 trillion in market capitalization, making it the first U.S. chipmaker to join the trillion-dollar club.
The gaming and AI chip company, whose shares rose 3.8% in trading before the bell on Tuesday, was valued at $998 billion.
Meta Platforms Inc (NASDAQ:) , valued at about $670 billion as of last close, clinched the trillion-dollar market capitalization milestone in 2021, while Apple Inc (NASDAQ:), Alphabet (NASDAQ:) Inc, Microsoft Corp (NASDAQ:) and Amazon.com Inc (NASDAQ:) are the other U.S. companies that are part of the club.
AI took center stage after Nvidia stunned investors with a revenue forecast last week that surpassed analysts’ expectations by more than 50%.
Wall Street analysts called Nvidia’s forecast “unfathomable” and “cosmological”, hiking their price targets in droves. The highest price target valued the company at about $1.6 trillion, on par with Google-parent Alphabet.
“Given the valuation is well above the long-term average, there will be significant pressure to deliver high growth on a consistent basis … there could be volatility in its share price to come,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, said.
Nvidia’s shares rose about 25% last week sparking a rally in AI-related stocks and boosted other chipmakers, helping the close on Friday at its highest in over a year.
OpenAI-owned ChatGPT’s rapid success has prompted tech giants such as Alphabet and Microsoft to make the most of generative AI, which can engage in human-like conversation and craft everything from jokes to poetry.
