Nvidia Corporation's shares have regained momentum, poised to potentially achieve their most successful year on record. The company achieved a significant milestone by reaching a market capitalization of $1.2 trillion for the first time, culminating in a record-high closing on Tuesday.
Throughout the day, Nvidia's stock, identified as NVDA, exhibited robust performance, surging by up to 5% to reach an intraday peak of $490.81. Ultimately, the day concluded with a notable 4.2% increase, settling at $487.84. Concurrently, the broader market benchmark, the S&P 500 index (SPX), experienced a more modest gain of 1.5%. Notably, the previous week marked a significant achievement as Nvidia's shares crossed the $500 threshold for the very first time.
Following an initial display of strength, Nvidia later tempered its gains, notwithstanding an impressive earnings report from the previous week. In this report, the graphics-processing unit manufacturer exceeded Wall Street's projections for data-center sales by an impressive margin of over $2 billion for the quarter. Additionally, the company's revenue projection for the current quarter exceeded expectations by a notable sum of more than $3 billion.
On the milestone-setting day, Nvidia's market capitalization also surpassed the $1.2 trillion mark. This achievement was substantiated by Dow Jones Market data. Impressively, Nvidia's market cap saw a remarkable increase of nearly $1 trillion in just over a year, demonstrating a staggering augmentation of $925 billion since the stock's lowest point in 2022, which occurred on October 14. At that juncture, shares concluded below $113, marking the first instance since August 2020, as per Dow Jones data.
Nvidia's stock encountered a period of turbulence the previous fall, largely attributed to the need to substitute approximately $400 million in projected data-center sales to China. This substitution was necessitated by the requirement to adopt equipment compliant with U.S. regulations on AI technology and to address inventory write-downs.
For the current year, Nvidia's shares have exhibited an extraordinary surge of 234%, a noteworthy contrast to the S&P 500's more moderate gain of 17%. Furthermore, this year's performance has already eclipsed the formidable 224% increase witnessed in 2016. The company's shares are currently on track to challenge their most impressive one-year upswing of 308%, previously achieved in 2001, according to FactSet data.
In terms of trading activity, Nvidia's shares emerged as the second most actively traded within the S&P 500 on the highlighted Tuesday, recording an exchange volume exceeding 69 million shares. The sole entity with higher trading activity was Tesla Inc. (TSLA), which witnessed a trading volume of over 132 million shares.
On a parallel note, Tesla's shares experienced a substantial uptick of 7.8% on the same day, marking the most significant single-day surge in five months. This surge was reportedly triggered by news of Tesla's plans to launch a $300 million artificial intelligence (AI) computing cluster that leverages thousands of Nvidia GPUs.
Coincidentally, Nvidia, in collaboration with Alphabet Inc. (GOOG, GOOGL), revealed that their cutting-edge data-center chips are pivotal in powering the Google Cloud Platform as well as the PaxML large language model. This partnership underscores Nvidia's prominence in the realm of advanced computing solutions.
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