Shares of Nvidia (NASDAQ:NVDA) experienced a slight retreat in early trading on Thursday, following a significant surge that propelled the company’s market capitalization past the $3 trillion mark for the first time.
Opening at $1,240.09 per share, Nvidia’s stock price saw a marginal decline of around 0.4% during early morning trading.
Wednesday’s impressive performance elevated the chip giant to surpass Apple (NASDAQ:AAPL), securing its position as the second-most valuable company on the US stock market, with Microsoft (NASDAQ:MSFT) currently leading.
This surge coincided with a broader uptick in tech stocks, fueled by softer US economic data and a decrease in Treasury yields, fostering optimism that the Federal Reserve might implement rate cuts as early as July.
Nvidia has become synonymous with investor fervor in artificial intelligence, a trend that gained momentum following OpenAI’s introduction of ChatGPT in late 2022.
The stock has surged over 140% this year and more than 200% over the past year, with a remarkable gain exceeding 3,300% over the last five years. In comparison, the Nasdaq experienced more modest gains of 14%, 29%, and 126% over the same periods, respectively.
The latest rally in Nvidia’s stock follows CEO Jensen Huang’s announcement at an industry conference on Sunday. Huang revealed plans to launch a high-powered version of the Blackwell chip, named Blackwell Ultra, in 2025, followed by a new AI chip platform called Rubin in 2026, with an Ultra version of Rubin slated for 2027.
Nvidia stands as the preferred supplier of AI chips and integrated software within the tech industry. Major players like Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOG), Meta (NASDAQ:META), Microsoft, Tesla (NASDAQ:TSLA), and others rely on its hardware to power various applications, from cloud-based AI services to in-house AI models and solutions.
In the first quarter, Nvidia reported impressive financial results, with adjusted earnings per share soaring by 461% to $6.12 and revenue surging by 262% to $26 billion compared to the same period a year ago. Notably, Nvidia’s Data Center revenue witnessed a staggering 427% year-over-year increase to $22.6 billion, constituting 86% of the company’s total revenue for the quarter, while its gaming segment generated $2.6 billion in revenue.
Additionally, Nvidia announced plans for a 10-for-1 stock split scheduled for June 7, alongside a dividend increase from $0.04 per share to $0.10 per share.
Despite Nvidia’s dominance in the AI space, it faces stiff competition from rivals such as AMD (NASDAQ:AMD) and Intel (NASDAQ:INTC), both advancing their own AI chip initiatives. However, Nvidia’s stronghold in the AI sector appears poised to persist in the foreseeable future.
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