Nvidia shares hit a new all-time high, solidifying the company's position as a global leader in semiconductors and artificial intelligence. Following the results of trading on Wednesday, the shares rose by 4.3%, ending the session at $154.31. The company's market capitalization reached $3.77 trillion, which allowed it to overtake Microsoft Corp., estimated at $3.66 trillion, and take the first place in the world ranking of public companies by this indicator.
Nvidia's stock price has risen more than 15% since the beginning of 2024, continuing the strong upward movement that began in the previous two years. In 2023, the company's securities rose in price by almost 240%, and in 2024-by more than 170%. Since April of this year, the capitalization of Nvidia has increased by almost $1.5 trillion.
The company's financial results released in the last quarter were a key driver of growth, despite restrictions on the export of advanced chips to China. According to Bloomberg estimates, more than 40% of Nvidia's revenue comes from tech giants such as Microsoft, Meta, Alphabet and Amazon, which continue to increase investment in artificial intelligence infrastructure.
Nvidia CEO Jensen Huang said at the annual meeting of shareholders that demand for products remains high. He confirmed the previously announced position on the beginning of a new phase of large-scale modernization of the computer industry related to the introduction of AI technologies. Nvidia, until recently little known outside the professional circle, has now become one of the most influential companies in the technology sector and a symbol of the "AI era" in the stock market.
Despite its rapid growth, the company remains relatively moderately valued. According to the data, Nvidia shares are trading at a multiplier of 31.5 to expected earnings for 12 months-below the average value for the last 10 years and only slightly higher than the Nasdaq 100 index multiplier (27). The PEG ratio (price-earnings growth ratio) is 0.9 — the lowest indicator among the so-called "Magnificent Seven" of the largest technology companies. companies.
According to Bank of America, 74% of institutional investors with a long-term strategy already hold Nvidia shares in their portfolios. This is less than that of Amazon, Apple and Microsoft, whose share in the funds reaches up to 91%. At the same time, according to Bloomberg, almost 90% of analysts recommend buying Nvidia shares, despite the fact that the current price is 12% below the average target level set by the analytical consensus.
In the short term, analysts maintain positive assessments of the company. However, the further dynamics of the stock will depend on how stable the investment rates of clients in the field of AI will be. If infrastructure costs slow down, there may be corrective movements and increased volatility.
