Computer chip manufacturer Nvidia briefly joined the exclusive club of companies with a $1 trillion market capitalization as market demand for artificial intelligence (AI) tech reached a crescendo.
The milestone was hit on May 30 in the United States morning trading hours by the computer chip and graphics card manufacturer with its shares hitting a daily high of over $418 according to Google Finance.
Nvidia shares closed the day at just over $401 and the firm currently has a market cap of $992 million.
In the United States, there are only four companies that have a valuation of more than $1 trillion: Apple, Microsoft, Amazon and Alphabet — Google‘s parent company.
Nvidia has seen a year-to-date gain of over 180 due to soaring demand for graphics processing units (GPUs) that power generative AI tools.
According to a May 30 Reuters report, analysts said 80 of these GPUs are currently manufactured by Nvidia.
Some may see Nvidia’s recent breakout price action as a sign of an overheated market but other analysts suggest there’s still plenty of room for Nvidia to grow with suggestions that the AI boom may only just be getting started.
"Technical traders and AI mania have pushed Nvidia toward the $1 trillion cap and it is not inexpensive," said Jim Kelleher, an analyst from Argus Research.
Nvidia isn’t alone in its quest to bring AI-ready chips to market. Microsoft is reportedly developing its own AI chip to power AI applications for Sam Altman’s artificial intelligence firm OpenAI as well as its own internal projects.
While tech companies and chip manufacturers in the U.S. are scrambling to get up to speed on everything AI, Chinese developers are finding ways to work around sanctions that banned the latest version of Nvidia chips from being obtained locally.