The renowned chipmaker Nvidia has recently made headlines with an unprecedented surge in its market capitalisation, setting new records on Wall Street.
The surge, fueled by stellar quarterly earnings and robust demand for its AI technologies, has reshaped market dynamics and triggered a rally in semiconductor-related stocks in the Indian market.
Record-breaking market capitalisation gain
In a single trading session, Nvidia witnessed a staggering 16% jump in its share price, adding a remarkable $277 billion to its market capitalisation. This surge catapulted Nvidia’s total market value close to $2 trillion, surpassing even Meta Platforms’ previous record gain of $197 billion.
Such an astronomical increase in market value is unprecedented in Wall Street’s history, highlighting the extraordinary performance of Nvidia in the tech sector.
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Stellar financial performance and global impact
Its exceptional financial performance in the fourth quarter supported Nvidia’s surge. The company reported a substantial revenue increase to $22.10 billion, significantly surpassing analysts’ estimates of $20.62 billion.
Moreover, adjusted earnings per share stood at $5.16, outperforming expectations of $4.64. The robust financial results underscored the growing demand for Nvidia’s AI technologies, particularly from tech giants like Microsoft Corp. and Meta.
The fiscal year is February-January.
| 2023 | 2022 | 2021 | 2020 | |
| Sales/Revenue | 26,974 | 26,914 | 16,675 | 10,918 |
| Pretax Income | 4,181 | 9,941 | 4,409 | 2,970 |
| Net Income | 4,368 | 9,752 | 4,332 | 2,796 |
| EBITDA | 7,121 | 11,215 | 5,714 | 3,272 |
The ripple effects of Nvidia’s surge were felt beyond Wall Street, particularly in semiconductor-related stocks in India. Companies like ASM Technologies and SPEL Semiconductors experienced notable gains in February, with SPEL Semiconductor Ltd shares surging by 56% and ASM Technology rallying by 83%.
On February 23, shares of ASM Technology rose by roughly 10%, closing at ₹926.55 on BSE. At the same time, shares of SPEL Semiconductor Ltd were locked in the 5% upper circuit, indicating positive momentum in semiconductor-related stocks.
The positive momentum in Nvidia shares catalysed a broader rally in semiconductor stocks, signalling the growing influence of global tech giants on international markets.
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Comparison with other market giants
The magnitude of Nvidia’s single-day gain is staggering, surpassing the total market value of significant corporations like Reliance Industries Limited (RIL) in India.
While RIL boasts a market capitalisation of approximately $243 billion, Nvidia’s surge added $277 billion in just one day. This comparison underscores the sheer scale of Nvidia’s market dominance and its impact on the global tech landscape.
Market analysts’ projections and potential catalyst for US stock market rally
Market analysts are bullish on Nvidia’s future prospects, with many raising their price targets for the stock following its stellar performance. Rosenblatt Securities, among the most optimistic, raised its price target to $1,400, implying a potential market value of $3.5 trillion for Nvidia.
Such projections highlight the market’s confidence in Nvidia’s continued growth trajectory and its pivotal role in driving innovation in the tech sector. Nvidia’s remarkable earnings report has sparked optimism among investors, potentially reigniting Wall Street’s appetite for US stocks.
Analysts at JPMorgan Chase & Co. anticipate that Nvidia’s strong performance could overshadow concerns about Federal Reserve interest rate policies and propel another bullish shift in the stock market.
The positive sentiment surrounding Nvidia’s earnings has already led to significant gains in major indices like the S&P 500 and Nasdaq 100, indicating renewed investor confidence in the tech sector.
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Conclusion
Nvidia’s historic surge in market capitalisation has reshaped the landscape of the global stock market, highlighting the company’s pivotal role in driving innovation and growth in the tech sector.
With record-breaking gains and bullish projections from market analysts, Nvidia continues to solidify its position as a market leader and a key driver of technological advancement.
As the company continues to innovate and expand its footprint, its influence on both domestic and international markets is expected to remain profound, shaping the future of the semiconductor industry and beyond.
