With the rapid development of the artificial intelligence revolution, AI giant Nvidia has ushered in a historic moment. As of the US stock market close on June 5th, Eastern Time, Nvidia's stock price rose more than 5%, to $1224.4, a 147% increase since the beginning of the year, with a total market cap of $3.01 trillion, becoming the third company in history to join the "3 trillion dollar club" after Apple and Microsoft; it has also surpassed Apple to become the second largest company in the current US stock market in terms of market capitalization.

Previously, due to the booming AI industry, Apple, which was slightly weak in this business, had its market value surpassed by Microsoft. Now, only a few months later, Nvidia, which has attracted attention from the capital markets, has also caught up. Currently, Nvidia's market value is more than $10 billion higher than Apple's, but still less than Microsoft's $140 billion. This means that the gap in market value between the two is less than 5%.

The AI era capital darling, Nvidia lives up to expectations.

The leap in Nvidia's market value is a miracle. A year ago, the company's market value was less than $1 trillion, ranking after giants such as Google, Amazon, Apple, and Microsoft. In the ranking of the "magnificent seven" in technology, its market value was only slightly higher than Meta and Tesla.

With the continuous boom of AI business, this chip giant has gradually become the biggest favorite of the capital market. Nvidia's stock price has increased by as much as 700% in two years, pushing its market value to milestones of $1 trillion, $2 trillion, and even $3 trillion. Looking at the longer term, five years ago (in mid-2019), Nvidia's stock price was only about $35, with a market value of $87.5 billion, a more than 33-fold increase from now.

Recently, Nvidia's bullish news has not stopped, and the market's optimism has not diminished.

Firstly, soaring revenue and profits in the latest financial data, and the official announcement of a 1-for-10 stock split plan, have already injected full confidence in investors. Ben Reitzes, an analyst at research institution Melius Research, believes that one indicator can show why this chip giant is truly unique, which is its profit margin, "in the next two years, we do not see anyone posing a major challenge to Nvidia's profit margin."

Secondly, with the commissioning of a new generation of AI chips, Nvidia's industry status will become more stable. CEO Huang Renxun announced that the Blackwell chip has been put into production and is expected to be delivered in the second quarter. The first named Blackwell chip GB200, is praised by Nvidia as the "most powerful chip in the world," which will generate a large amount of revenue for the company and attract high hopes from the market.

And as the industry leader, Nvidia is still "very cool." Huang Renxun said that Nvidia will adhere to the route of data center scale, pacing, technical restrictions, and a unified architecture, which means adhering to the use of the most powerful semiconductor process technology at the time and updating products once a year, using a unified architecture to cover the entire data center product line. Previously, the company had always followed the industry's average update cycle of two years to launch chips.

In the capital market, Nvidia, the total leader of AI, has driven the entire semiconductor sector and related ETFs to soar. Yesterday, related semiconductor ETFs led by $ProShares Ultra Semiconductor (USD.US) rose across the board.$Proshares Trust Pshs Ult Semicdt (USD.US)$Can continue the momentum? Wall Street is optimistic.

Despite Nvidia's stunning rise this year, before the stock split, analysts from Bank of America and Goldman Sachs have once again raised their target prices for the stock.

Bank of America analyst Vivek Arya raised Nvidia's target price from $1320 to $1500 on June 3rd, less than half a month since the last time the target price was raised after Nvidia released its earnings. $1500 is currently the highest target price for Nvidia among Wall Street analysts.

Bank of America's research report wrote that they recently had positive feedback from management about market demand and customer interest, except there are some supply limitations. Despite the competition in the market, Nvidia has many years of leading advantages in terms of performance, product line, existing capabilities, team, and developer support, and will benefit from customers' competition for AI layouts.

Bank of America's research report wrote that they had positive evaluations of market demand and customer interest from NVIDIA's CFO Colette Kress and other executives they communicated with recently. Although the market is full of competitors, NVIDIA has a leading advantage in performance, product line, existing capabilities, team, and developer support, and will benefit from customers' rush to lay out artificial intelligence.

But it's not just Bank of America that sees a bright future for Nvidia. Among the 42 analysts surveyed by institutions, 93% rated Nvidia as "buy" and the rest rated it as "hold", with no one suggesting "sell". However, the average target price for the industry is currently $1203.61, which Nvidia has already exceeded.

According to media estimates, analysts expect Nvidia's net income for this fiscal year to jump from $30 billion in the previous fiscal year to $65 billion. And in just the past month, these forecasts have risen 10%. More importantly, not only is Nvidia's profit growing, but its profit margin is also increasing. Analysts predict that Nvidia's gross margin for this fiscal year will rise from 59% two years ago to 76%.

The sharp rise in institutional earnings expectations has led to a decline in the stock's forward earnings valuation. Data from the London Stock Exchange (LSEG) shows that Nvidia's forward P/E ratio is about 37 times, down from 48 times a year ago. By comparison, AMD is at 38 times and Intel is at 21 times. Wall Street analysts said, "The market has been trying to keep up with the company's constantly improving growth trajectory. At the level of more than 30 times, this still doesn't look like a bubble region."

Recently, the most eye-catching thing is Nvidia's stock split. Starting from tomorrow, Friday, June 7th, Nvidia's stock price will begin to split after-market trading, and starting from next Monday, June 10th, it will be traded at the adjusted price. Will Nvidia be more popular after the split? Can it continue its current upward trend? The global market is eagerly awaiting.

Dear mooers,

Do you think Nvidia may surpass Microsoft to become the largest company in terms of market capitalization?

What trend do you think Nvidia will show after the stock split?

Feel free to leave your valuable comments in the comment section~

Editor/new