Nvidia’s stock increased over 3 percent on Wednesday, becoming the first company to reach a market worth of over $5 trillion.
The impressive milestone indicates a tremendous growth of the company, which has developed to be not just a niche producer of video game processors but also a component in the artificial intelligence hype.
The stock of Nvidia, which was up 5 percent on Tuesday, is up over 50 percent year to date.
The recent upswing comes after CEO Jensen Huang stated that Nvidia anticipates claims of 500 billion artificial intelligence chips and declared it was constructing seven new supercomputers for the U.S. government.
Nvidia announced on Tuesday that it is acquiring a $1 billion stake in Nokia to form a strategic alliance with the networking company to create a next-generation 6G cellular technology.
The U.S. stocks, which were driven by the AI trade, surged to record highs on Tuesday. Technology gains increased the major averages, and both Apple and Microsoft hit a market value of above $4 trillion as their shares increased.
The frenzied U.S. stock market is in spite of lingering fears of a bubble, especially because AI-related expenditure has resulted in led to record deals and valuations.
The International Monetary Fund and Bank of England, in the previous month, were the most recent financial institutions to caution that the world stock markets might be in crisis in case investor appetite for AI turns sour.
Ark Invest CEO Cathie Wood indicated the likelihood of the near-term of a “reality check” of AI valuations, but denied the threat of an AI bubble.
Wood informed CNBC on the sidelines of Saudi Arabia’s Future Investment Initiative in Riyadh that “If our expectations for AI … are correct, we are at the very beginning of a technology revolution.”
