Shares of chip maker Nvidia soared more than 20% on Thursday after the company announced an impressive quarterly sales outlook on the back of demand for processors that run artificial intelligence systems.
“We have an incredible order to refurbish our data centers around the world,” Nvidia CEO Jensen Huang told analysts on a conference call Wednesday.
Nvidia chips are used to power AI systems.Demand for chips soared during this time cryptocurrency boom, that system also relies on processing power.At the close of trading on Wednesday, Nvidia’s market cap was at reach $755 billion, the fifth highest official valuation in the United States. On Thursday, the company was closing in on a trillion-dollar club.
Other chip stocks, such as AMD, ASML and Taiwan Semiconductor Manufacturing Company, also rose on the rise of AI. Since the introduction of his ChatGPT chatbot last year, the buzz around AI has intensified, with companies at the forefront of technology such as Microsoft, Google and Nvidia becoming hot stocks among investors.
The rally in Nvidia shares has also lifted the broader market, with Thursday’s surge enough to send the S&P 500 index up about 0.5%.
Nvidia’s stock more than doubled in 2023, even as fears of a microchip war erupting between the U.S. and China linger in the sector.
But analysts disagree about how long the rally will last. Bank of America’s Michael Hartnett called the rise “baby bubbleMeanwhile, researchers at Goldman Sachs said tools built on AI could help revitalize the global economy. $7 trillion increase.
The increased demand for Nvidia’s chips comes amid calls for greater scrutiny of AI technology. After meeting with European Union officials on Wednesday, Alphabet CEO Sundar Pichai said Google is working with other companies to Develop AI services responsibly.
And starting in July, New York will require companies that use AI to recruit jobs to provide candidates with information such as: Hot new law By labor advocacy groups.
Joe Rennison Contributed to the report.
