Semiconductor giant Nvidia is getting a big boost from the current wave of artificial intelligence (AI) hype. As a result, company stock is skyrocketing.
Artificial intelligence-related stocks have been boosted by an announcement from Nvidia that it was increasing production of its AI chips to meet surging demand.
Nvidia Flying High on AI
Since the emergence of ChatGPT, tech firms have been riding the wave of hype to get in on the latest big thing in technology.
On May 24, Nvidia released its earnings report. This increased its stock market value by about $200 billion to over $960 billion. The firm reported a record $11 billion in revenue for the first quarter.
Nvidia shares (NVDA) surged around 30% in after-hours trading to reach an all-time high of $394. Moreover, Nvidia shares are up a whopping 166% since the beginning of 2023.
Furthermore, the big stock move extended the company’s lead as the world’s most valuable chipmaker and Wall Street’s fifth-most valuable company, reported Reuters.
Chief Financial Officer Colette Kress said that generative AI was at an “inflection point” as OpenAI’s ChatGPT has just had its “iPhone moment” for the industry. She added:
“It’s put us in a spotlight that we understood would happen. But it’s just very difficult to determine when that possibility would be there. But it is here, this inflection is here, the inflection on AI and the inflection on AI and accelerated computing.”
Daniel Morgan, a senior portfolio manager at Synovus Trust, commented:
“With all the enthusiasm around AI and the fact Nvidia delivered a huge beat for first-quarter results and second-quarter estimates, this gives some actual evidence AI is for real.”
In March, Nvidia unveiled new chips that it said would boost the computing speed of increasingly complicated artificial intelligence algorithms. The H100 chip and a new processor called the Grace CPU Superchip will be the core of AI infrastructure, according to Nvidia.
Tech Stock Revival
Rival chipmaker Advanced Micro Devices (AMD) also saw a boost in stock prices. AMD shares jumped 10% on the day to trade at $117.12 after-hours. The company stock has gained 83% since the beginning of the year.
Other firms racing to get into AI have also seen gains in share prices. Microsoft (MSFT) and Alphabet (GOOG) both gained a couple of percent in after-hours trading.