Jensen Huang, president and CEO of Nvidia, speaks during the company’s event at the 2019 Consumer Electronics Show in Las Vegas on January 6, 2019.
David Paul Morris | Bloomberg | Getty Images
Shares of Nvidia traded up 25% on Wednesday on an outsized earnings report that beat consensus estimates. And if it holds throughout the trade, they will close at an all-time high.
Nvidia’s previous record high occurred in November 2021, when the stock price closed above $333. Shares opened Thursday at $385, giving back some of the overnight gains.
To put the gain into perspective, Nvidia stock has rallied 235% since its two-year low of $112 on Oct. 14, beating out the performance of every other S&P 500 company since then. Meta is the second best performing stock with a gain of 97% over the same time period.
The land maker’s market capitalization was on pace to open at $975 billion after a 30 percent gain in after-market trading on Wednesday. The company reported first-quarter adjusted earnings per share of $1.09, compared with the Refinitiv consensus estimate of 92 cents. Its first-quarter revenue of $7.19 billion was significantly above the consensus estimate of $6.52 billion.
But it was the chipmaker’s leading position as a supplier of AI chips, along with its guidance of $11 billion in sales for the current period, that may have sent shares soaring even higher.
The share price rise puts Nvidia within reach of one trillion dollar valuationsomething only a handful of publicly traded companies have ever achieved. Apple was first valued at $1 trillion in 2018 and will reach a valuation of $3 trillion in 2022. Alphabet, AmazonSaudi Aramco, Tesla, Meta and Microsoft have all at one point been valued at $1 trillion or more.
Analysts quickly moved to raise price targets for Nvidia after the company reported earnings results. JPMorgan doubled its price target from $250 to $500 and reiterated its overweight rating. “Generative AI and large language/transformer models are driving accelerating demand,” JPMorgan analyst Harlan Sur said.
“What can we say other than just WOW,” Evercore analyst CJ Muse wrote in a Wednesday note. Evercore raised its price target from $320 to $500 and reiterated its outperform rating.
However, Nvidia’s rapid rise in valuation does not lift other chip manufacturers. The AI chip craze has been fueled by the demand for powerful graphics processors, or GPUs. The company has been a historical outperformer in the high-performance “discrete” GPU market, especially compared to Intel.
Nvidia shares have significantly outperformed both Intel and AMD’s share prices.
But neither Intel, which has reportedly struggled to deal with inventory issues and recently implemented significant cost cuts, nor AMD has been able to achieve the same level of share price growth as Nvidia. Intel shares were up nearly 10% so far this year at the close Wednesday; AMD stock rose 67% over the same time.
Nvidia shares were already up 109% so far this year, before the after-hours rally.
CNBC’s Michael Bloom, Robert Hum and Kif Leswing contributed to this report.