Nvidia yesterday became the first company in history to hit a $4trn valuation as its chips continue to power the AI revolution.
The chips giant hit a valuation of $1trn back in June 2023, and its rise since then has been nothing short of meteoric as it has become the undisputed leader in the infrastructure behind the AI boom.
Yesterday (9 July), it became the first company in history to briefly touch the $4trn valuation with its shares hitting $164 at one point.
“AI has ignited a new industrial revolution — science and industry will be transformed,” Jensen Huang, founder and CEO of Nvidia, said in May, and it is indeed this success in building the chips that power much of today’s AI infrastructure that has led to the US-based company beating Microsoft and Apple to the historic valuation.
The strong share performance comes after the chipmaking giant reported a very strong first quarter back in May, with revenue up 69pc year on year, and despite its warning that it could lose out on $8bn in revenue from US restrictions to chip exports during Q2.
Nvidia reported revenues of just more than $44bn in Q1, a 12pc rise from the previous quarter. The company also forecast a positive outlook for the current quarter, forecasting revenue to reach around $45bn – in spite of the recent export control on its chips.
In April, Nvidia was informed by the US government that it required an export licence to sell its previously approved H20 processors to China. This cost the company $4.5bn.
CEO Huang said on an earnings call with investors that the Chinese market for AI chips, worth $50bn, is “effectively closed to US industry”.
Despite this, the global demand for Nvidia’s AI infrastructure continues to boom. The company’s first quarter data centre revenue was $39bn, up 73pc compared to the same period last year. Nvidia’s gaming arm, which revolutionised the industry with its GPUs, recorded $3.8bn in revenue in Q1 – up 42pc year on year.
The strained global trade situation is not halting Nvidia’s global expansion. Also in May, the company announced a partnership with the Taiwanese government for an AI factory in the country, as well as a new deal with the Saudi Arabia for thousands of its AI chips.
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