After clearing an already-high bar for its earnings on Wednesday,
Nvidia’s
stock gained $276.65 billion in market value on Thursday, the largest one-day gain for any company on record.
That’s larger than
Meta’s
record one-day market value gain of $204.49 billion, set on Feb. 2, according to Dow Jones Market Data.
Nvidia blew past expectations for its fourth-quarter earnings and revenue, and gave current-quarter guidance that well exceeded expectations. Nvidia shares hit an intraday high of $785.75.
With a current market cap of $1.963 trillion,
Nvidia
also easily surpassed
Amazon.com
and Google-parent
Alphabet
to become the third-largest U.S. company by market value, after
Microsoft
and
Apple.
Nvidia’s shares closed up 16.4% on Thursday, to a new record of $785.38. Nvidia needs to reach $800 a share to have a $2 trillion market value.
The Magnificent Seven stocks—Nvidia,
Microsoft,
Meta Platforms,
Alphabet,
Tesla,
Apple,
and
Amazon.com
—collectively added about $514 billion in market value on Thursday, their largest one-day gain since Nov. 22, 2022, according to Dow Jones Market Data.
The Magnificent Seven’s total market value is now roughly $13.35 trillion, a new high.
Shares of rival chip maker
Advanced Micro Devices
rose 10.7%, and
Qualcomm
rose 1.8%, while
Intel
closed down 1.1%. Advanced Micro Devices current market cap is $293.8 billion; Intel’s current market cap is $181.7 billion; and Qualcomm’s current market cap is $172.7 billion.
On top of Nvidia’s numbers, there were a number of doubts that were resolved:
Supply and Demand
Ahead of Wednesday’s report there had been some concerns about whether demand had already peaked for Nvidia’s graphics processing units, particularly due to reports that waiting time for orders had decreased.
Nvidia’s executives dismissed those concerns, noting the company expects supply to still be insufficient to meet demand for its next-generation B100 chip, coming this year.
“While the stock has doubled since its 2021 high, the world has changed since then, and there is significant demand for artificial intelligence, and thus, Nvidia has plenty more room to run. We expect Nvidia shares to reach $1,000 in the next 12 months,” wrote James Demmert, chief investment officer at Main Street Research, in a research note.
China
Almost the only negative note in the earnings report was that Nvidia said its data center revenue from China dropped significantly due to U.S. export controls imposed in October—and even that was taken as a positive by some analysts.
The point is that if Nvidia can deliver this kind of earnings beat even without China, it might be able to do even better if it can start shipping significant volumes of chips which are compliant with U.S. controls. That still looks to be some way off, with China expected to only be a mid-single digit percentage of data center sales in the current quarter, but it means there’s room for further growth.
“Nvidia delivered on high expectations with acceleration in Data Center segment revenue…and a robust outlook to start [fiscal year] 2025 despite significantly reduced sales into the China geography,” wrote Stifel analyst Ruben Roy.
Roy kept a Buy rating on the stock and raised his target price to $910 from $865, based on a price-to-earnings multiple of 35 times Nvidia’s forecast earnings for its fiscal 2026 year.
Training vs. Inference
Nvidia has established its dominance due to the use of its GPUs for training AI systems. However, demand for chips to support inference—the process of generating answers or results from AI models—instead of training is expected to rise as a proportion of the market.
That could potentially create some space for rivals, but Nvidia looks to be establishing a strong position in inference too. CEO Jensen Huang told analysts that in the past year at least around 40% of Nvidia’s data center revenue came from inference, and he added that estimate was probably understated.
“With significant barriers to entry created by its CUDA software stack, we see limited competitive risks and expect NVDA to continue to dominate one of the fastest-growing workloads in cloud and enterprise,” wrote KeyBanc analyst John Vinh in a research note.
Vinh raised his target price on Nvidia to $1,100 from $740 and kept an Overweight rating on the stock. The new target is based on a price-to-earnings multiple of 31 times Nvidia’s forecast earnings for its fiscal 2026 year.
Write to Adam Clark at [email protected]
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