AI Boom Pushes Nvidia's Market Value To $2 Tln

(RTTNews) - Chipmaker Nvidia's (NVDA) market capitalization hit the $2 trillion mark, fueled by robust demand for AI chips, during the intraday trading on Friday morning.

Nvidia is the third U.S. company to surpass the $2 trillion milestone and is currently below Apple (AAPL) with a market value of $2.83 trillion and Microsoft (MSFT) with a market capitalization of $3.06 trillion.

This comes a day after it added $273 billion in its market value, driven by its earnings report which revealed a 769 percent increase in fourth-quarter profit and a 580 percent jump in full-year profit compared to the previous year.

The Santa Clara-based company posted revenue of $22.10 billion for the fourth quarter, a 265 percent increase from a year ago. Nvidia plays a crucial role in manufacturing AI server chips which cost more than $20,000 each and are used by software companies and cloud service providers for the development and integration of AI technology.

"Fundamentally, the conditions are excellent for continued growth," Nvidia CEO Jensen Huang said during the earnings call as the company expects $24 billion in sales in the current quarter.

The company plans to launch high-end graphic processing units in the second quarter of 2024 and a custom-made chips business. However, Microsoft had collaborated with Intel to develop chips in an attempt to cut back dependence on Nvidia.