Nvidia briefly hits $2 trillion valuation as AI frenzy grips Wall Street

WASHINGTON: Nvidia briefly hit $2 trillion in market value for the first time on Friday, riding on insatiable demand for its chips that made the Silicon Valley firm the pioneer of the generative artificial intelligence boom.

The milestone followed another bumper revenue forecast from the chip designer that drove up its market value by $277 billion on Thursday - Wall Street's largest one-day gain on record.

Its rapid ascent in the past year has led analysts to draw parallels to the picks and shovels providers during the gold rush of 1800s as Nvidia's chips are used by almost all generative AI players from ChatGPT-maker OpenAI to Google.

That has helped the company vault from $1 trillion to $2 trillion market value in around eight months - the fastest among U.S. companies and in less than half the time it took tech giants Apple and Microsoft.

"For AI companies today - the leaders of the sector - what's going to be binding for them is not going to be demand. It's just going to be their capacity to answer the surging demand," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Nvidia's shares closed 0.4% higher on Friday, giving it a market value of about $1.97 trillion. They had risen as much as 4.9% to a record high of $823.94 earlier in the session, after a more than 16% jump on Thursday.

The shares have surged nearly 60% this year, after more than tripling in value in 2023. The chip designer's 2024 share surge has been crucial to the S&P 500's gains, contributing to more than a quarter of the stock index's rise this year.

Its latest market-beating forecast of whopping 233% growth in first-quarter revenue helped global markets notch record highs on Thursday.

The breakneck growth has drawn analysts and investors from far and wide to Nvidia.