Nvidia clocks up biggest one-day stock market increase in US history
Nvidia value skyrockets £160bn in biggest one-day stock market surge in US history as it benefits from AI boom
Chip maker Nvidia has achieved one of the largest one-day stock market increases ever in the history of the US company as it benefits from the boom in artificial intelligence.
Shares of the US giant rose 24 percent on Wall Street yesterday, adding more than £150 billion to its market cap.
The profit came close to the total value of Shell, the second largest company in the UK stock market, and left Nvidia worth around £760 billion.
The increase came after the California company said sales would reach £9 billion in the three months to July, crushing Wall Street estimates and sending stocks into a frenzy.
Chief executive Jensen Huang said it was in the right place at the right time as artificial intelligence (AI) and ChatGPT took off, allowing it to benefit from the large investment being pumped into the technology.
Record breaker: Shares in chipmaker Nvidia rose 26% after sales surpassed Wall Street estimates
“When generative AI came along, it spawned a great app for this computing platform that had been in preparation for a while,” he said.
Nvidia has played a key role in the growing popularity of AI by supplying chips to Microsoft, among others, to develop the technology.
Geoff Blaber, the CEO of CCS Insight, a tech consultancy, said: “We’re clearly seeing a huge spike in demand for AI and Nvidia is leading the way.”
But the rise in stock price has also had a knock-on effect on several US and Japanese equipment suppliers to chip makers, with shares in Tokyo-based Advantest, Applied Materials and Lam Research posting significant gains.
Alphabet and Microsoft, which have invested billions of dollars in AI, also rose 2.3 percent and 3.9 percent, respectively.
And the news could spark further excitement for British chipmaker Arm’s upcoming listing.
Nvidia’s growth is a huge shot in the arm for Arm’s listing as this AI arms race takes hold.
“This is the gold rush and investors will be laser-focused on these dynamics for Arm,” said Dan Ives, an analyst at Wedbush Securities.
He added that the latest update was a “game changer” for the industry, potentially boosting Arm’s upcoming valuation.
Nvidia offered to buy back Arm in 2020, but failed to close the deal due to regulatory concerns. Arm now plans to list in New York after rejecting a dual listing in the UK.
The record for a one-day increase in value was Apple in November 2022, when it rose by £155 billion.
Nvidia is now poised to become the first chip company with a market cap of $1 trillion, alongside Apple, Microsoft, Alphabet and Amazon.