Nvidia’s value explodes by £160bn in biggest one-day stock market rise in US history as it benefits from AI boom
Chipmaker Nvidia posted one of the biggest single-day increases in stock market value in US corporate history as it took advantage of the boom in artificial intelligence.
Shares of the US giant jumped 24% on Wall Street yesterday, adding more than £150bn to its market capitalisation.
The gain was close to the full value of Shell, the second-biggest company on the UK stock market, and left Nvidia valued at around £760bn.
The surge came after the California-based company said sales would hit £9billion in the three months to July, crushing Wall Street estimates and sending shares into a frenzy.
Chief Executive Jensen Huang said he was in the right place at the right time when artificial intelligence (AI) and ChatGPT took off, allowing him to leverage the major investment being injected into the technology.
Record breaking: Shares of chipmaker Nvidia jumped 26% after sales figures shattered Wall Street estimates
“When generative AI arrived, it sparked a killer application for this computing platform that had been in the works for some time,” he said.
Nvidia has played a key role in the growing popularity of AI, supplying chips to Microsoft to develop the technology.
Geoff Blaber, managing director of CCS Insight, a technology consultancy, said: “Obviously we’re seeing a huge increase in demand for AI and Nvidia is on the front line.”
But the rise in its share price also had a ripple effect on several US and Japanese chipmakers OEMs, with shares of Tokyo-based Advantest, Applied Materials and Lam Research making significant gains.
Alphabet and Microsoft, which have invested billions of dollars in AI, also rose 2.3% and 3.9% respectively.
And the news could fuel more excitement for British chipmaker Arm’s upcoming listing.
“Nvidia’s growth is a huge boost for Arm’s listing as this AI arms race takes hold.
“It’s the gold rush and investors will be focused on that momentum for Arm,” said Wedbush Securities analyst Dan Ives.
He added that the latest update was a “game changer” for the industry, potentially boosting Arm’s future valuation.
Nvidia offered to buy Arm in 2020, but failed to complete the deal after regulatory concerns. Arm now plans to list in New York after snubbing a dual listing in the UK.
The record for a one-day jump in value was Apple in November 2022, when it rose by £155 billion.
Nvidia is now on course to become the first chip company with a market capitalization of $1 trillion, placing it alongside Apple, Microsoft, Alphabet and Amazon.
