Nvidia has joined the exclusive club of companies with a $1 trillion market capitalization as the chipmaker benefits from the growing use of artificial intelligence. Nvidia Corp. joins tech titans like Alphabet and Apple in the $1 trillion club. Its stock rose 5% in Tuesday trading, eclipsing $408 per share. CNBC reports shares will have to stay north of $404.86 for the company "to maintain that distinction." Since its initial public offering in 1999, the stock is up roughly 33% annually compared with an average annual gain of 7% in the benchmark S&P 500 index over the same time.
Last week the maker of graphics chips for gaming and artificial intelligence reported a quarterly profit of more than $2 billion and revenue of $7 billion, both exceeding Wall Street's forecasts, reports the AP. The company was founded in 1993 and initially focused on 3D graphics and gaming. Co-founder Jensen Huang remains the company's president and chief executive.
The Washington Post gave good context to what's fueling the gains earlier this week: "The company has for years made the computer chips that can run graphics-heavy video games. But several years ago, artificial intelligence researchers began using those same chips to run the powerful new algorithms that were causing breakthroughs in the field." CNBC reports Nvidia becomes the fifth publicly traded US company to be worth $1 trillion right now. Microsoft was the first, in 2018, and is currently joined by Alphabet, Amazon, and Apple.
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