It was only a matter of time for this moment of glory, especially after such a superlative earnings performance. Nvidia Corp.’s market-capitalization crossed the $2 trillion mark, right out of the gates as the stock began trading on Friday.
New Kid On $2T Club: Nvidia opened Friday’s session at $809.70, up 2.87% from the previous session’s closing price. With the Santa Clara, California-based company’s outstanding shares at 2.49 billion, Friday’s opening price meant the company’s valuation shot up to $2.016 trillion.
Nvidia joined an elite list of global corporations that currently boast a $2 trillion market cap. It is only fourth in the list after Microsoft ($3.07 trillion), Apple ($2.83 trillion and Middle East oil giant Saudi Aramco ($2.065 trillion).
The rally in Nvidia shares started as early as 2023 after a lackluster performance in 2022. It rose 240% in 2023 and has added 58.6% year-to-date (based on Thursday’s closing price). The strong two-day rally in the stock came after the company reported forecast-beating fourth-quarter results, thanks to strong Data Center revenue. The company is enjoying a near monopoly position in the market for AI accelerators and its high-performance chips such as the H100 are selling like hot cakes.
Nvidia’s Early Gaming Bet & Growth: Nvidia was founded in April 1993 by the trio of Jensen Huang, Chris Malachowsky and Curtis Priem on the premise that PCs would one day become consumer devices for enjoying games and multimedia.
The first product rolled out of Nvidia’s stable in 1995 in the form of a PCI card named NV1, which incidentally did not sell well. The company forged an important manufacturing partnership with Taiwan Semiconductor in 1998.
The real breakthrough came in 1991 when Nvidia invented the GPU. In 2001, the company unveiled its nForce Platform, signaling its entry into the integrated GPU market. It introduced the first programmable GPU, the GeForce3.
On the financial front, Nvidia achieved the milestone of $1 billion in annual revenue in 2001. The stock was added to the S&P 500 Index that year.
In 2005, Nvidia developed a processor for Sony’s PlayStation 3. The $1-billion number become Nvidia’s run rate for quarterly revenue in 2007.
When it comes to Nvidia’s stock, the company went public in 1999, offering 3.5 million shares at $12 per share, raising $42 million in the process. The stock closed the debut session Jan. 22, 1999 at $19.70, giving it a market-cap of $626.1 million.
Nvidia’s Journey to $1 Trillion Market Cap: The chipmaker touched a $1 trillion market cap in mid-June 2023 amid the AI frenzy and since then it has held the $1 trillion+ valuation. It has taken the company just eight months to add another $1 trillion to its market cap.
From its IPO, the journey to the first $1 trillion mark spanned exactly 25 years.
With AI frenzy currently in its nascent stages, it may just be a matter of time before Nvidia rises up in the ranks to become the most valued company. Wedbush’s Daniel Ives said in a note Monday, “Jensen and Nvidia have essentially cracked the code and sparked a generational tech transformation that investors are trying to get their arms around.”
But doubters point to potential AI bubble burst and competition as headwinds for the company. Deepwater Asset Management’s Gene Munster said in a post on X he expects the AI wave to remain alive and kicking at least for the next three to five years.
At last check, Nvidia pulled back below $800 and traded at $794, up 1.1%, according to Benzinga Pro data.
(The article is published under a mutual content partnership arrangement between The Free Press Journal and Benzinga)
