Nvidia's Stock Closes at Record High, Sending Its Market Value to $1.2 Trillion

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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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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