The $1 Trillion Club
Nvidia did the unthinkable in the eyes of some stock market advisors. Days after CNBC reported that Costco Wholesale Corporation (COST) was a much better investment than Nvidia (NVDA)–the stock had a massive 24% rally. CNN Business reports, “Nvidia took Wall Street by surprise last week when it reported gangbusters earnings and an exceedingly strong revenue forecast for the year ahead. Fueled largely by the recent boom in AI, the report pushed share price higher and secured its position as one of the largest publicly traded companies in the world. Booming demand for its AI chips has landed Nvidia (NVDA) a prime spot in one of the most exclusive clubs on Wall Street: The chipmaker hit a market cap of $1 trillion on Tuesday. It’s just the ninth company globally to have achieved such a feat, and only five other companies worldwide currently have the distinction: Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), and Saudi Aramco.” This left many wondering why Nvidia had been slated as a lousy investment.
Nvidia and the Chip War Fallout
Before this transpired, the U.S. government imposed a new license requirement for exports to China and Hong Kong. The condition of which essentially hung Nvidia’s data-center business in China out to dry. With the company having surged 110% in 2023, the optimism around the future of artificial intelligence and Nvidia’s ability to help it progress remains. However, some analysts believe the stock has been overbought and will soon fall. So, is the AI boom far from over?
The AI Boom
According to a ChatGPT prediction, Nvidia will rise to $1000 by 2030. With rumors of the metaverse being powered by Nvidia and an increase in video graphic cards in gaming and data centers–the forecast isn’t that far-fetched. Yet, we are talking about the stock market, so many other factors should be considered before investing. Like other companies, Nvidia will face increasing competition in China and other markets. There will also continue to be supply chain issues and legal risks.
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