AI Mania Propels Nvidia Value by Nearly $220 Billion This Year
Nvidia Corp. is a clear winner in this year's artificial-intelligence frenzy, at least going by stock market gains.
Shares in the Santa Clara, California-based company rose as much as 13% on Thursday, poised to add about $65 billion in market value and taking its year-to-date gains to about $219 billion.
While nearly 20 analysts raised their price targets on the stock, Goldman Sachs upgraded it to buy as the chipmaker reported fourth-quarter results that beat expectations and gave a bullish revenue outlook for the current quarter. The strong forecast signals that the company's push into AI computing chips is paying off.
Nvidia dominates the market for graphics chips designed for complex computing tasks needed to power AI applications, leading analysts and investors to believe that the company will benefit as more people use ChatGPT-like applications.
“When you have ‘the next big thing' in tech, it's natural for investors to scramble to find ways to play the theme,” said Russ Mould, investment director at AJ Bell. “Nvidia's involvement in the AI space now puts it directly under the spotlight, which means there could be strong demand for the shares.”
The expectation is driven by the hope that chatbot operators will need more computing power as they respond to the millions of queries received across the web, from deadline-driven students to struggling songwriters.
Technology Buzzword
AI has quickly become the latest technology buzzword after the massive popularity of OpenAI's ChatGPT tool. Now everyone wants in on the action with technology behemoths like Microsoft Corp. and Alphabet Inc. announcing their AI projects in recent weeks — and yet these stocks have underperformed the tech-heavy Nasdaq 100 Index.
Nvidia, which
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