Why Nvidia Stock Hit a Market Cap of $3 Trillion on Wednesday

Actions of Nvidia (NASDAQ:NVDA) rose (again) on Wednesday, jumping up to 5.2%. At the end of the day, the stock was still up 5.2%, putting its market capitalization above $3 trillion for the first time.

Several developments in the field of artificial intelligence (AI) have helped fuel the stock’s relentless rise.

The model child of AI

As a leading supplier of graphics processing units (GPUs) used in artificial intelligence (AI), it appears that any positive news in the field could be a catalyst for Nvidia stock. The phenomenon was clearly visible today.

The news broke that Taiwan Semiconductor Manufacturingalso called TSMC, purchases high NA extreme ultraviolet machine from ASML. This is the latest AI chip manufacturing technology, and Nvidia is TSMC’s second customer, giving it full access to this high-end technology.

In an unrelated development, Hewlett Packard Company released results for its fiscal second quarter (ended April 30), and the results exceeded even the most optimistic expectations. Although the company generated modest year-over-year gains, it cited growing demand for AI as a catalyst for its better-than-expected results.

What is good for the goose…

What do these developments have to do with Nvidia? Nothing, at least not directly. However, this illustrates that the demand for AI continues to accelerate, reinforcing the theory that it is still very the beginnings of AI. Therefore, what’s good for AI seems to be good for Nvidia.

The company has been one of the biggest beneficiaries of AI adoption, as Nvidia’s processors set the benchmark for AI use cases. Although estimates vary, Nvidia is credited with a market share of around 90% of the AI ​​chip market.

Finally, enthusiasm has reached fever pitch ahead of Nvidia’s 10-for-1 stock split, which is expected to take place after the market closes on Friday.

The adoption of generative AI continues to gain momentum. Although estimates vary widely, the market size is expected to be between $2.6 trillion and $4.4 trillion in the coming years, according to global management consulting firm McKinsey & Company.

Growing evidence suggests there’s still plenty of room for Nvidia to run.

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