Nvidia’s shares jumped more than 25% last week after the company’s better-than-expected Q1 2023 earnings and guidance.
After experiencing a 50% drop in 2022, data center and chip behemoth Nvidia is staging a stunning stock market recovery this year. The company’s shares jumped 3.5% in premarket on Tuesday, meaning the stock is set to hit a $1 trillion market cap at today’s market open for the first time.
Nvidia’s Shares Up 165% in 2023
Shares of Nvidia are up 3.5% in premarket trading Tuesday, standing at $403 at the time of writing. If this price level holds through the market open, it will mark the first time Nvidia’s market valuation exceeds $1 trillion. The stock closed at $389.46 per share on Monday after climbing more than 2.5%.
With the current gains in the premarket, the tech giant’s shares have surged roughly 165% in 2023, indicating a jaw-dropping rebound following a tumultuous 2022. A considerable portion of Nvidia’s share price increases came last week when the company published its Q1 2023 results that beat analysts’ estimates.
According to the report, Nvidia generated $7.19 billion in revenue in the first quarter, smashing consensus projections of $6.52 billion. The company reported adjusted earnings per share (EPS) of $1.09, topping the expected 92 cents per share.
But the report’s highlight was Nvidia’s sales forecast, with the chipmaker saying it expected sales of around $11 billion in the current quarter, more than 50% higher than analysts’ estimates of $7.15 billion.
AI Boom Leads to Nvidia’s Homerun
While Nvidia has been one of the leading companies in the data center and gaming markets for years, its impressive sales growth and stock market display are largely driven by the ongoing artificial intelligence (AI) frenzy. The remarkable success of ChatGPT in recent months sparked immense interest in AI technologies, which has led to a surge in demand for Nvidia’s cutting-edge chipsets.
Still, it appears that the supply cannot keep up with the current demand for advanced graphics processing units (GPUs) used to power AI solutions. As a result, many firms from this industry are resorting to their connections to gain access to more chips.
Meanwhile, even though NVDA is having a record-breaking year, not all investors and market watchers are bullish on the tech company’s stock. On Monday, ARK Innovation manager Cathie Wood said Nvidia was “priced ahead of the curve,” adding that other companies, including Elon Musk’s Tesla, are also set to benefit from the current AI mania.
—
Originally Posted May 30, 2023 – Nvidia Becomes a $1 Trillion Company as Shares Up 3.5% Premarket
Disclosure: Tim Fries has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing of this article. Please consult our website policy for more information.
Disclosure: The Tokenist
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult a licensed financial advisor prior to making financial decisions.
Disclosure: Interactive Brokers
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from The Tokenist and is being posted with its permission. The views expressed in this material are solely those of the author and/or The Tokenist and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Join The Conversation
If you have a general question, it may already be covered in our FAQs. If you have an account-specific question or concern, please reach out to Client Services.