On May 28, the “AI shovel seller” Nvidia's stock price surged nearly 7% to 1,139 US dollars, once again reaching a record high. The market capitalization also broke through 2.8 trillion US dollars, which is only about 100 billion US dollars short of Apple's market value of 2.91 trillion US dollars. Following the announcement of Nvidia's latest earnings report, the stock price has reached record highs for three consecutive days, rising about 20% during the period.
Notably, it only took 9 months for Nvidia's market capitalization to go from $1 trillion to $2 trillion. The increase from $2 trillion to $2.8 trillion even took less than 3 months. Next, the market will keep a close eye on when Nvidia's market capitalization surpasses $3 trillion.
Last week, Nvidia, which was named “the most important stock on Earth” by Goldman Sachs, once again announced unparalleled results that shocked global investors, dispelling people's concerns about the slowdown in AI related corporate spending. Facing growing consumer demand for AI software, generative artificial intelligence products such as ChatGPT and Google Gemini are making every effort to reserve AI GPUs.
Musk's strong assist! xAI financing sends positive signals to the industry
According to reports, Musk's artificial intelligence startup xAI has successfully raised $6 billion from investors. The company said the funds will be used to bring xAI's first products to market, build advanced infrastructure, and accelerate research and development.
Notably, xAI has never publicly discussed the possibility of developing internal chips as Amazon, Google, Meta, and Microsoft, which means that a large amount of the newly raised capital should be spent on buying Nvidia's hardware.
According to Musk's original plan, xAI will try to connect Nvidia's H100 graphics processor clusters to build an xAI supercomputer.
Specifically, to train its next version of Grok, xAI expects to require up to 100,000 GPUs, and plans to serial these chips into a supercomputer, or “computing superfactory.” It is estimated that the xAI supercomputer will connect to a chipset four times larger than today's largest GPU cluster.
CJ Muse, an analyst at Cantor Fitzgerald, said that the XAI news has further strengthened the market's confidence that AI chip spending will continue to grow. He also said that Nvidia's earnings report “completely dispels concerns that demand for the company's chips may decline in 2024.”
Wall Street's bullish sentiment is getting more aggressive
I/O Fund technology industry analyst Beth Kindig (Beth Kindig) has long been optimistic about Nvidia. She wrote in the report: By 2027, the total potential market size of the global artificial intelligence data center market will reach 400 billion US dollars, reach 1 trillion US dollars by 2030, and the AI chip market is expected to be mainly occupied by Nvidia.
She predicts that with its impenetrable moat, Nvidia's stock price will soar 258% from current levels by 2030, and its market value will reach 10 trillion US dollars.
According to Futu data, Wall Street investment institutions are generally optimistic about Nvidia's subsequent stock price trend. The 43 analysts participating in the rating have generally raised Nvidia's target price recently. The main logic is that Blackwell-architected GPUs are expected to bring about a larger revenue scale. The average target price reflecting consistent expectations reached 1,139 US dollars, while the consistent rating was “strongly recommended”. The highest target price even reached 1,400 US dollars.
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