Chip maker Nvidia’s valuation has been fluctuating this quarter and is on pace to end it at a loss.
Earlier this week, Nvidia stock was leading the semiconductor sector higher as investors scooped up shares of struggling AI-related companies.
Nvidia is having a strong week, with its stock rising more than 10% since Monday. This gain has helped the company recover about half of its last week’s losses, which saw its market cap drop by $406 billion — a record decline for any public company.
Demand for Nvidia’s cutting-edge products is intense that it’s causing stress among customers, according to CEO Jensen Huang. His comments earlier this week helped boost Nvidia's market value by over $200 billion, highlighting the company's volatile nature.
Nvidia's technology has a direct impact on the financial performance of major customers, which include Amazon, Facebook parent Meta, and Google parent Alphabet.
As the leading player in artificial intelligence, Nvidia has also lifted its peers. Semiconductor companies such as Micron and Intel saw increased interest from institutional investors, with their stocks rising 4.4% and 3.5%, respectively, after a challenging period that knocked down valuations across the industry.
The growing interest in machine learning, which began to peak in late 2022 with the release of the ChatGPT generative AI chatbot, has fueled Nvidia’s financial results. Analysts expect the company to report $126 billion in sales and $67 billion in net profits in its fiscal year ending January 2025 — a huge leap from the $$27 billion in sales and $4 billion profit booked in the fiscal year ending January 2023. Nvidia stock has soared by about 700% over the past two years as demand for its AI systems has surged.
Despite its massive size, with a market cap that sometimes tops $3 trillion, Nvidia's stock volatility has earned it a reputation similar to meme stocks. The company, led by Jensen Huang, boasts year-to-date gains of more than 140%, but its stock has been on a wild ride this quarter.
