How AI helped Nvidia to become a $2 trillion company | – Times of India



Nvidia reached a historic milestone as it was successful in recording a valuation of $2 trillion. The growth of the US-based chipmaker was fueled by the rising demand for its chips that have made the company a pioneer in the generative artificial intelligence (AI) space. According to a report by the news agency Reuters, The milestone comes after Nvidia posted another strong revenue forecast, driving its market cap up by $277 billion.This was the largest ever one-day gain for a US company.

How Nvidia’s AI chips have helped the company

The chip maker’s technology powers nearly all major generative AI systems from ChatGPT-creator OpenAI to Google which helped the company’s strong growth over the past year. This demand has helped Nvidia rocket from $1 trillion to $2 trillion market value in just eight months. The growth was faster than any other US company and it took less than half the time it took for Apple and Microsoft.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank said: “For AI companies today, what will constrain them is not demand but their ability to meet the surging demand.”
Nvidia shares have also hit another record high of $808, cementing its position as the third most valuable American firm with $2.05 trillion market valuation. The stock has jumped nearly 60% year-to-date on top of more than tripling last year. Nvidia’s rally has contributed over a quarter of the S&P 500’s gains in 2024 so far.
The company’s latest forecast of 233% revenue growth in the first quarter spurred global markets to new highs. This fast pace has attracted intense interest from analysts and investors worldwide.
One investor said: “I’m a European fund manager, but I’ve had more emails about their earnings than any other company by far.”
Despite the share price surge, Nvidia’s valuation has fallen relative to profit estimates. Its forward price-to-earnings ratio is about 31 times, down from 49 a year ago, reflecting rapidly rising projections.
Brian Colello, strategist at Morningstar: “Leading cloud firms plan to increase spending to meet AI demand, and it appears virtually all this outlay will go to Nvidia. We expect Nvidia’s revenue to rise by billions each quarter in 2025 as more chip supply comes online.”





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