Nvidia is the hottest stock on the market right now. After posting stellar first-quarter earnings and giving investors hope for more to come with huge forward guidance, the stock soared by as much as 24% on Thursday. The price spike added more than $200 billion to Nvidia’s valuation, giving it the rare distinction of reaching a $1 trillion market cap.
Jensen Huang, Nvidia’s chief executive, experienced a windfall of nearly $7 billion with the surge in stock value. Holding a 3.5% ownership stake in the company, Huang has seen his company soar due to its foray into the artificial intelligence (AI) market. Investors have bet big on the chip-maker as the go-to stock for AI technology.
Analysts have pointed to Nvidia’s advantage in the AI space. Bank of America earned them the distinction of the company that is “selling picks and shovels to everyone getting in on the gold rush; their tech being the underlying foundation of the rest of the AI boom.”
JPMorgan, as well as Goldman Sachs, have raised their price targets for Nvidia following the jump in stock prices. They expect massive demand for AI technology to balloon even further.
Huang, who took Nvidia public in 1999 at the height of the dot-com bubble, has seen the company grow from a valuation of $626 million into a leader in AI technology. The AI gold rush has been one of the hottest investor bets of the year, driving the price of Nvidia to dizzying heights.
The ongoing COVID-19 pandemic has further accelerated the demand for the chipmaker’s technology, as organizations shift rapidly into remote operations. With earnings continuing to surge, Nvidia looks all but certain to maintain its position at the top of the artificial intelligence race.
Nvidia’s CEO, Jensen Huang, is a Taiwanese-American entrepreneur with a net worth of over $14 billion. He co-founded Nvidia in the mid-1990s and the company has now grown into a dominant market leader in the game and AI technology space. Huang holds various patents in GPU design and has also set up a multimillion-dollar foundation to support medical science research and educational initiatives.
