With the release of impressive financial reports, on February 22nd local time, the stock price of American chip giant Nvidia soared, with a market value close to $2 trillion, second only to Microsoft and Apple.
Nvidia's impressive performance and stock price jump have also ignited global stock markets. From the United States to Europe and Asia, key stock indices have risen to historic highs.
The public opinion believes that from the launch of the Sora video application to the soaring stock price of Nvidia driving global stock markets, it once again proves the charm and potential of artificial intelligence (AI).
"The most important stock on Earth"
On the 22nd, Nvidia's stock price surged by 16.4%, with its market value skyrocketing by $277 billion in a single day - equivalent to Coca Cola's market value, reaching $1.96 trillion, setting a record for the largest daily increase in market value for a US company and the highest level since the company went public in 1999.
On that day, the three major stock indexes in the New York Stock Exchange also rose in response.
As of the close of the day, the Dow Jones Industrial Average rose 1.18%, breaking through 39000 points for the first time.
The S&P 500 index rose 2.11%, marking its largest daily increase since January 2023.
The Nasdaq Composite Index, which is concentrated in technology stocks, performed exceptionally well, jumping nearly 3% and setting the largest daily increase in a year.
The Nasdaq closed at 16041.62 points, approaching its all-time high of 16057.44 points.
With Nvidia leading the way, the stock prices of other chip stocks and tech giants have also risen in sync. Semiconductor company AMD rose 11%, Facebook parent company Meta and Amazon rose about 3.9% and 3.5% respectively, and Microsoft rose 2%.
Not only is the US stock market in full swing, but European and Japanese stock markets are also showing promising gains.
The Pan European Stoxx 600 Index, FTSE 100 Index, and Nikkei 225 Average Price Index, which measure the performance of European stock markets, all rose to historic highs.
Some argue that this surge has shattered the market's pessimistic predictions about the US stock market and also dispelled doubts from the outside world about whether the seven tech giants can continue to drive the stock market higher.
Google's parent companies Alphabet, Amazon, Apple, Facebook's parent company Meta, Microsoft, Nvidia, and Tesla are known as the "seven giants" of the US stock market. These seven stocks have continued to rise since the beginning of this year, increasing their market value by about $500 billion on the 22nd alone, setting the largest daily increase since 2022.
Given that Nvidia's stock price surged by about 230% last year, Goldman Sachs analysts have recently hailed Nvidia as the "most important stock on Earth".
However, there are also some investors who are cautious about this fanaticism.
Philip Colmar of MRB Partners, an American investment institution, believes that all the "Qixiong" stocks have foam. He said that these companies have high profit expectations and valuations, which may not disappoint, but considering the cyclical nature of chip stocks, Nvidia's stock market rise still carries "inherent risks".
Net profit surged by 581%
The direct "booster" for the global stock market rebound is naturally Nvidia's strong financial report released on the 21st.
The company's financial report shows that its revenue for the fiscal year 2024 was approximately $60.9 billion, a year-on-year increase of 126%; The net profit was $29.76 billion, a year-on-year increase of 581%.
As of the fourth quarter ended January 28, 2024, the company's revenue was $22.1 billion, a year-on-year increase of 265%; The net profit was nearly 12.3 billion US dollars, a year-on-year increase of 769%.
This impressive performance report is believed to far exceed market expectations, strongly boosting Nvidia's stock price and igniting a global stock market frenzy.
It is believed that Nvidia's impressive performance is due to large technology companies aggressively investing in the field of artificial intelligence (AI), which has helped Nvidia's sales growth.
It is reported that companies such as Amazon, Microsoft, Google, and Cisco are collaborating with Nvidia to produce customized chips.
Facebook parent company Meta CEO Zuckerberg announced in January this year that he plans to purchase AI chips worth billions of dollars from Nvidia this year.
Microsoft has its own AI assistant tool and has purchased tens of thousands of Nvidia's most advanced chips.
Nvidia is a leading AI chip company, and its chips are an important tool for training AI, currently supporting the most advanced AI systems. According to Dan Morgan, Vice President of investment trust company Synovus Trust Company, Nvidia accounts for approximately 70% of global artificial intelligence semiconductor sales.
With its market value increasing by $277 billion, Nvidia's net worth has skyrocketed to nearly $2 trillion, indicating that the company, founded in 1993, has surpassed Amazon and Google's parent company Alphabet to become the third highest valued US listed company after Microsoft and Apple.
Analysts say that although Nvidia is also facing challenges, including slowing sales in the Chinese market due to US export restrictions, difficulty in meeting demand for chip supply, and other technology companies and competitors developing AI chips, Nvidia's upward trajectory will not be threatened in the short term due to its first mover advantage and deep accumulation in the software field.
AI reaches the "tipping point"
Some comments suggest that since the beginning of the year, the Sora video application has sparked another wave of artificial intelligence, while Nvidia's stock price has skyrocketed, once again announcing the acceleration of the AI era.
"In the past year, we have seen generative AI truly become a new application field, a new way of computing." Huang Renxun, co-founder and CEO of Nvidia, stated on the 21st that artificial intelligence is forming a "new industry".
At the end of 2022, OpenAI's ChatGPT was launched, making AI overnight popular.
Generally speaking, the tech industry boom has come and gone in a hurry, but over the past year, the AI boom has continued unabated and attracted massive amounts of capital to enter.
Recently, Sun Zhengyi, founder of SoftBank Group, also plans to raise $100 billion to establish an AI chip company.
Huang Renxun predicts that generative AI is sparking a new wave of investment, with a scale of trillions of dollars.
Some chip company executives and analysts believe that the AI craze may persist, as AI has not yet penetrated the corporate world and is far from widespread in daily life.
Huang Renxun said that accelerated computing and generative AI have reached the "tipping point", and the demand from companies, industries, and countries around the world is skyrocketing.
Jamie Zakalik, an analyst at Neuberger Berman, an asset management company, believes that although few technology companies have truly established profitable businesses from AI investments, AI is not the cyclical hype of the metaverse a few years ago. It can completely change the way humans interact and many people work. "AI is indeed quite remarkable.".