The market valuation of Nvidia (NVDA.O) closed above $2 trillion for the first time in history on Friday amid a rally in the stock markets after an optimistic report on AI was released by Dell Technologies (DELL.N).
Nvidia’s stock gained 4% in value after Dell, which sells high-tech servers made with Nvidia’s processors announced in an optimistic report that it is expecting a surge in its AI-optimized servers’ demand.
Dell shares themselves skyrocketed by 38% to reach a record high, before subsiding a little and resting at 32% increase by the end of trading.
Friday’s rally has put Nvidia’s market valuation to a record high of $2.06 trillion, which marks its first trading close above the 2-trillion mark. This makes the tech-based company the second most valuable company behind Microsoft and Apple, with $3.09 trillion and $2.77 trillion, respectively.
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The Added Advantage
Where one of the positives of the rally fueled by Dell was that Nvidia closed its market valuation at more than $2 trillion, it also helped other AI companies to reach their record highs on the Wall Street.
Other companies like Super Micro Computers (SMCI.O), that sell servers made with Nvidia’s AI chips saw its stock growing by 4.5%. Broadcom (AVGO.O) and Marvell Technology (MRVL.O) also increased by 8%, while Advanced Micro Devices (AMD.O) gained 5% in stock value.
The PHLX chip index (.SOX) grew by 4.35% to shatter its own record and lift the total gain in 2024 to 18%.
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Nvidia in the AI Boom
Nvidia is a major stakeholder and beneficiary of the AI boom as it controls over 80% of the high-end AI chip market, with renowned customers including OpenAI, Microsoft (MSFT.O), Meta Platforms (META.O),and Google (GOOGL.O). It has gripped up its tight supply chain to compete and hold a majority stake in the fast emerging generative AI industry.
The company has recently claimed the record of being the most traded stock by value in Wall Street, replacing Tesla (TSLA.O). Investors exchanged $36 billion worth of Nvidia stock on average for over 30 sessions, compared with just $21 billion of shares exchanged for Tesla.
On Feb.23, Nvidia added $277 billion of stock value in just one trading session making it a record in the history of Wall Street, after it forecasted roughly three times the quarterly revenue.
stock has already risen by more than 66% this year, after it tripled in the year 2023, overtaking the market value of Amazon (AMZN.O)and Alphabet last month. It did manage to edge above the $2 trillion mark, a week ago but wasn’t able to hold its gain, making the last trading session the first time for Nvidia to close above that mark.