Shares of US chipmaker Ndivia soared yesterday as it cashes in on the artificial intelligence craze.
The stock, one of the ‘Magnificent Seven’, rose more than 11 percent to an all-time high after revenue rose more than 262 percent in the most recent quarter.
That added more than £210 billion to its value in a single day and left it with a market capitalization of £2 trillion.
The profit tops the £192bn profit for pharmaceutical giant AstraZeneca, the biggest company on the UK stock market.
Nvidia shares have more than doubled this year and are up seven-fold since the start of 2023.
Boom time: Nvidia boss Jenen Huang has seen the US chipmaker’s shares nearly double this year
The increase came after the company, which designs chips used in AI, revealed excellent quarterly results.
Revenue hit £20bn in the three months to the end of April, up 262 per cent from a year earlier and beating Wall Street estimates.
The chipmaker also announced a ten-for-one stock split effective June 7 and said it would increase its quarterly cash dividend by 150 percent.
Chief executive Jensen Huang said demand was “very strong” and rejected fears that this momentum would fade soon.
Nvidia has cashed in as the world’s largest technology companies rush to develop new artificial intelligence products.
Amazon, Google, Meta and Microsoft have said they will need to spend more on the chips and data centers needed to train and operate their artificial intelligence systems in the coming months.
Dan Ives, an analyst at Wedbush Securities, described Huang as “the godfather of AI” and said he has “delivered another masterpiece” with results.
“The AI revolution begins with Nvidia and, in our opinion, the AI party is just beginning,” he added.
Founded in 1993, the story of the world’s most valuable chipmaker began in a Silicon Valley restaurant, with Huang and two other engineers, Chris Malachowsky and Curtis Priem.
Without knowing exactly what his business would be like, his strategy was to make early bets on markets that barely existed at the time, starting with PC gaming and graphics processing.
This turned out to be a huge success, as its graphics processing unit is now essential in the gaming world in popular titles like Call of Duty.
But its most recent bet in the world of AI has proven to be its most lucrative, making it the first semiconductor company to amass a market valuation of $1 trillion (£787 billion) in May last year.
It means Nvidia is now established as a firm member of the ‘Magnificent Seven’, alongside US corporate giants Google, Alphabet, Amazon, Apple, Meta, Microsoft and Tesla.