Nvidia share prices spike after record profits
Nvidia’s stock market value soared to new heights on Thursday, reaching a market capitalization of almost $2 trillion following record profits that beat expectations. On Wednesday, the company reported revenue of $22 billion in the fourth quarter, a 265% increase from the same quarter a year ago.
The surge in share prices by 16.5% added approximately $277,000 million to its market value, marking the largest single-session stock market value increase in US history. This puts the company in exclusive company as one of only 26 companies in the S&P 500 with market capitalizations exceeding $273 billion.
Nvidia’s success comes from its custom-designed chips that are used to train and power generative AI services utilized by companies like OpenAI, Google, Microsoft and Amazon. The company announced that it expected earnings of $24 billion, considerably higher than the $22 billion expected by Wall Street for the fiscal first quarter of 2025.
Nvidia’s strong results and forecast have had a ripple effect around the world, with the Nikkei index in Japan surpassing levels last seen in 1989, and the Nasdaq technology index and the S&P 500 also advancing. Its data center segment also exceeded expectations, posting a 409% year-over-year increase, despite the company’s CFO Colette Kress stating that “data center sales had decreased significantly in the fourth quarter due to US government licensing requirements.”
Nvidia’s enormous growth in the AI market has placed the company in the spotlight, with Goldman Sachs calling it “the most important (company) on planet Earth.” The company’s president, Jensen Huang, has become a prominent figure in the technological industry, with a strong influence on the market.
As the company continues to capitalize on the AI revolution, it has been a key player in the technological industry, experiencing a record-setting performance in 2024.
Nvidia’s success continues to grow as the generative AI industry craves its chips more than ever. Its success can be attributed to its underlying technology and the increasing demand for AI applications, resulting in record income generated by Nvidia.