Nvidia Corp (NVDA.O) is nearing a market capitalization of $1 trillion, which would make it the first U.S. chipmaker to join the trillion-dollar club.
The gaming and AI processor manufacturer, whose shares increased by 3.8% in pre-market trading on Tuesday, was valued at $998 billion.
Meta Platforms Inc (META.O), valued at approximately $670 billion as of yesterday’s close, achieved a market capitalization of $1 trillion in 2021, joining Apple Inc (AAPL.O), Alphabet Inc (GOOGL.O), Microsoft Corp (MSFT.O), and Amazon.com Inc (AMZN.O) in the trillion-dollar club.
Nvidia’s sales prediction last week surprised investors by almost 50%.
Analysts on Wall Street referred to Nvidia’s projection as “unfathomable” and “cosmological” and raised their price targets in droves. The greatest price target valued the company at approximately $1.6 trillion, on par with Alphabet, the parent company of Google.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said, “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 in the future.”
Inspiring a rally in AI-related equities and bolstering other chipmakers, the Philadelphia SE Semiconductor index (.SOX) reached its highest level in over a year on Friday after Nvidia’s share price increased by about 25% last week.
The rapid success of OpenAI’s ChatGPT has prompted tech titans such as Alphabet and Microsoft to utilize generative AI, which can engage in human-like conversation and compose everything from quips to poetry.