NVIDIA Corporation NVDA is all set to become the fifth publicly traded company to be worth $1 trillion, joining Apple Inc AAPL, Microsoft Corp MSFT, Alphabet Inc GOOGL and Amazon.com, Inc (NASDAQ: AMZN thanks to the artificial intelligence revolution.
On Thursday, Nvidia shares jumped by 24% after it announced its first-quarter financial results. The company reported a first-quarter profit of $1.09 a share while offering second-quarter revenue guidance of $11 billion, nearly $4 billion more than the $7.15 billion consensus.
“When generative AI came along, it triggered a killer app for this computing platform that’s been in preparation for some time,” Nvidia Chief Executive Officer Jensen Huang said, according to The Wall Street Journal.
“We’re seeing incredible orders to retool the world’s data centers,” Huang added.
On Thursday, the company added $183.8 billion to its market valuation, moving its total to over $938 billion and inching toward becoming one of the world’s trillion-dollar companies.
With the help of AI, Nvidia’s processors drive new chatbots that generate cogent-sounding sentences and a raft of other tools that the world’s biggest companies are racing to deploy, The Wall Street Journal reported.
“This is going to be the largest change in tech we’ve seen since the internet; there’s little doubt in my mind.” Michael Sansoterra, the chief investment officer at Atlanta’s Silvant Capital Management, told the publication.
“What is so exciting for investors now is that after months of chatter around AI, the money is starting to flow,” he added.
“What is different about generative AI is that there are clear uses for the technology as businesses look for ways to exploit its capabilities,” Stacy Rasgon, a chip-industry analyst at Bernstein Research, told The Wall Street Journal. “It’s not crypto,” he added. “I’d bet in five or 10 years the overall opportunity is considerably higher than it is today because we’ll grow into this.”
Analysts also say the artificial intelligence boom holds much greater lasting promise for Nvidia than crypto.
The company has no competitor that can match its breadth of chips and software for the computing-intensive demands of generative AI. For example, UBS analysts estimate developing OpenAI’s ChatGPT, the first central productive AI system widely available, required some 10,000 Nvidia GPUs, the Wall Street Journal reported.
“I think you’re seeing the beginning of, call it, a 10-year transition to recycle or reclaim the world’s data centers and build it out as accelerated computing,” Huang said.
Read Next: Nvidia Stock’s 24-Year Journey: What A $1,000 Investment During IPO Would Be Worth Now
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