Nvidia’s stock skyrocketed on Thursday and set the biggest single-day increase in market value in history, pulling the overall stock market to new highs.
The value of Nvidia, a U.S. computer and software company, increased by 16.4% in one day of trading alone, a day after it released an earnings report that showed profits soaring as artificial intelligence applications drive up demand for its cutting-edge chips. The rally has added some $277 billion to the firm’s market capitalization. That eclipses, by an enormous margin, the previous $197 billion record set by Meta, the company that owns Facebook and Instagram.
Thursday’s growth added to the red-hot stock, which has grown more than 31% in the past month alone and a whopping 232% over the past year.
The rally led the broader stock market higher, with the S&P 500 up more than 2.1%, hitting a record high on Thursday. The tech-heavy Nasdaq was up even more dramatically, expanding nearly 3% in one day alone. It marks Nasdaq’s best day for the index in over a year.
The explosion of optimism in the tech space was fueled by Nvidia’s fourth-quarter earnings report, which was released after the bell on Wednesday.
The company reported adjusted earnings per share of $5.16 and record quarterly revenue of $22.1 billion, up 22% from the third quarter and 265% from a year ago. Analysts had expected earnings per share to be about $4.60 and quarterly revenue of just over $20 billion, so the news was a huge surprise to the upside.
The rapid growth of Nvidia, which specializes in the chips behind AI, is being fueled in part by a boom in interest in AI and the semiconductor chips that are needed.
“Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries, and nations,” said Jensen Huang, founder and CEO of Nvidia.
“Our Data Center platform is powered by increasingly diverse drivers — demand for data processing, training, and inference from large cloud-service providers and GPU-specialized ones, as well as from enterprise software and consumer internet companies. Vertical industries — led by auto, financial services, and healthcare — are now at a multibillion-dollar level,” Huang added in a statement.
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The release of the earnings report was hotly anticipated, given that Nvidia has consistently beaten earnings forecasts. It can be seen as an indicator of market optimism regarding AI.
“Analysts will also be wondering what it means for the artificial intelligence industry going forward, its growth rate, and potentially the direction of the equity markets, at least in the short term,” said Chris Fasciano, portfolio manager for Commonwealth Financial Network, prior to the earnings report being released.
