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Nvidia Sets Record for Largest Single-Day Market Value Gain
Nvidia saw a $329 billion (£258 billion) rise in its market capitalisation on Wednesday, following industry commitments to AI development.
Nvidia, the world’s third-most-valuable company, has added a record-breaking $329 billion in value over a single day, the most in market history.
Shares of Nvidia surged nearly 13%, driven by expectations that demand for its chips will remain strong after Microsoft announced on Tuesday that its spending on AI-related technology has expanded by 60% to $69 billion (£54 billion).
The Californian chip maker is currently worth more than Netflix, Coca-Cola, and Bank of America, and briefly became the world’s most valuable company in June after knocking Microsoft off the top spot with a market cap of $3.335 trillion (£2.61 trillion).
Investors are growing more confident that major companies will maintain their investments in the technical infrastructure of artificial intelligence currently being built by firms like Nvidia.
Microsoft CEO Satya Nadella and finance chief Amy Hood said on Tuesday that the company plans to spend even more on Nvidia-based infrastructure next year, while in a recent earnings call Mark Zuckerberg mentioned Meta’s collaboration with partners like Nvidia on its latest AI model, Llama 3.1.
Nvidia has been the one of the main beneficiaries of the AI boom, with its stock doubling in 2024 and up more than 500% since ChatGPT’s release in November 2022. The company currently dominates the AI semiconductor market with an 80% share, far surpassing its closest rival, AMD.
Stock prices so far this year for Nvidia average around $92.27 (£72.10), a sharp rise from the $36.56 (£28.57) average across 2023.
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Commenting on the swell in Nvidia share prices, Matt Maley, chief market strategist at Miller Tabak Asset Management, said: “The volatility in Nvidia shows how confused investors are right now.
“They’re worried that the huge capital investment into AI will not create the kind of return on investment that people have been hoping for over the past year.”
Nvidia is currently the main chip maker in the AI space, with its technology powering OpenAI’s wildly successful LLMs, including ChatGPT, causing a spike in the price of its product. Earlier this summer the price per unit for an AI-capable chip from Nvidia had risen to around $30,000 (£2,3567), with the chip maker reportedly struggling to meet this demand.
