The growth of creative artificial intelligence (AI) is everything, everywhere, and all at once for Nvidia Corp.
The chip designer’s shares kept going up on Thursday, jumping 25% after a great forecast showed that Wall Street hasn’t priced in the company’s AI potential, even though its value has already doubled by 2023.
Nvidia’s stock hit an all-time high in premarket trading, and the company’s market value was expected to grow by $189 billion to $945 billion.
The good earnings also led to a rise in the chip industry and among AI-focused companies, which boosted stock markets from Japan to Europe. Alphabet Inc, Microsoft Corp, and AMD were among the companies in the U.S. whose stocks went up by between 2% and 8%.
The tweet below confirms the news of Nvidia’s share surge:
Heard on the Street: Chip giant Nvidia’s shares surged nearly 25% in premarket trading after it forecast a revenue tailwind from the AI race, but if you don’t want to shell out for the expensive stock, there are other options https://t.co/naFe4uSSxR
— The Wall Street Journal (@WSJ) May 25, 2023
Analysts were quick to raise their price goals on Nvidia stock, and 21 of them changed their minds about the idea that all roads in artificial intelligence lead to the company because it makes the chips that power ChatGPT and many other similar services.
Stacy Rasgon of Bernstein said, “In the 15+ years we’ve been doing this job, we’ve never seen a forecast like the one Nvidia just put out for the second quarter, which by all accounts was cosmological and destroyed expectations.”
The fifth most valuable business in the U.S., Nvidia, said on Wednesday that its quarterly revenue would be more than 50% higher than what Wall Street expected. It also said that it would have more AI chips in the second half to meet a rise in demand.
As creative AI is used in every product and service, CEO Jensen Huang said that $1 trillion worth of data center equipment would need to be replaced with AI chips.
The results are good news for Big Tech companies, which have turned their attention to AI in the hopes that it will help bring in more customers at a time when their main sources of profit, digital ads, and cloud computing, are struggling because of the weak economy.
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“This Nvidia forecast changes the whole story about AI and future demand in the business world.” “The AI Revolution could be a turning point in history, and Nvidia is the key barometer,” said Dan Ives of Wedbush.
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