Nvidia, already the world's most valuable publicly listed company, experienced a significant surge in its share price, rising over 7% in overnight trading. This increase was propelled by an impressive financial update, including quarterly revenue more than doubling year-on-year to $96.2 billion. The renewed buying frenzy, ahead of Thursday’s market opening, is projected to add an additional $370 billion to the company's value, if the 7.3% gain holds. For context, this single-day gain surpasses the entire market capitalization of HSBC, the largest firm in London's FTSE 100, which stands at $260 billion.
The extraordinary performance was largely attributed to Nvidia's future guidance on sales and the sustained high demand for its chips, rather than just the headline numbers. Analysts like Kathleen Brooks, research director at XTB, noted that Nvidia has effectively countered criticism regarding its AI investment and financing model. The strong results are seen as a boost for the entire AI sector and the US stock market, which has experienced volatility recently. The stock is expected to open above $225, up from its Wednesday closing price of $209.66.
Investors had key questions about the durability of Nvidia's growth, and management provided reassuring answers. Ben Barringer, head of technology research at Quilter Cheviot, highlighted CEO Jensen Huang's indication of an extremely high sales pipeline for more than the next year. Nvidia also revealed a roughly $2 trillion backlog, signaling exceptionally strong demand. The company forecast a 70% jump in next fiscal year’s revenue, an unusual long-term projection that helped ease investor fears about the fading of the AI boom, leading to a 6.8% jump in shares that could add $295.7 billion in market value.
This strong quarter, coupled with positive commentary and robust guidance, convinced the market, leading to a rally in other AI-linked chip stocks as well, including Intel, Micron, Broadcom, and SK Hynix. Even AI cloud computing companies backed by Nvidia, like CoreWeave and Nebius, saw increases. Nvidia has consistently beaten revenue forecasts for 16 consecutive quarters, generating over $1 billion in revenue per day, and its latest results showed strong demand for its next-generation Rubin AI processors. At least 16 brokerages have since raised their price targets on Nvidia's stock.
