CALIFORNIA: Artificial intelligence-related stocks soared in extended session on Wednesday, increasing the market value by about $300 billion after chipmaker Nvidia Corp (NVDA.O) forecasted strong revenue growth and announced it was increasing manufacturing of its AI chips to keep up with rising demand.
After the bell, Nvidia’s stock soared as much as 28% to reach its all-time high of $391.50. Reuters said that this extended the Silicon Valley business’s lead as the most valuable chipmaker and the fifth-most valuable company on Wall Street, boosting its stock market value by approximately $200 billion to over $960 billion.
According to Daniel Morgan, senior portfolio manager at Synovus Trust in Atlanta, “with all the excitement around AI and the fact Nvidia delivered a huge beat for first-quarter results and second-quarter estimates, this gives some actual evidence AI is for real.” Morgan said Synovus is a shareholder in Nvidia.
Nvidia CEO Jensen Huang stated in a statement that the business is “significantly increasing our supply to meet surging demand” for its data centre processors. Nvidia estimated quarterly sales more than 50% above Wall Street projections.
On the strength of Nvidia’s impressive report, shares of other AI-related companies surged, adding additional about $100 billion in stock market value after the bell.
Advanced Micro Devices Inc (AMD.O), a rival chipmaker, jumped 10%. Both Google parent Alphabet Inc (GOOGL.O) and Microsoft Corp (MSFT.O), which are scrambling to integrate generative AI into their Web search systems, increased by nearly 2%.
Both C3.ai (AI.N), a provider of AI software, and Palantir Technologies (PLTR.N), which just unveiled its own AI platform, saw gains of approximately 8%.
After company OpenAI launched ChatGPT and attracted over a million users in a week, interest in AI soared this year. Generative AI can produce new material like fully formed text, graphics, and software code from historical data.
In anticipation of Nvidia’s earnings announcement on Wednesday, the chipmaker’s stock had already increased by 109% this year, making it the top performer in the S&P 500 (.SPX) year to date. According to Refinitiv statistics, after the rise, Nvidia is now trading at a price that is approaching its top of 68 times estimated earnings in 2021.
