- Nvidia's share price is on pace for a record high, sending it closer to a $1 trillion valuation.
- Nvidia's previous all-time high was in 2021.
- The company beat top- and bottom-line estimates Wednesday.
Shares of Nvidia are closed up 24% on Thursday on the back of an outsize earnings report that beat consensus estimates, reaching an all-time high.
Nvidia's prior record high occurred in November 2021, when share price closed over $333. Shares opened Thursday at $385 and gave back some of the overnight gains.
To put its gain in perspective, Nvidia stock was up 235% since its two-year low of $112 on Oct. 14, beating out the performance of any other S&P 500 company since then. Meta is the second best-performing stock with a gain of 97% during the same time period.
The chipmaker's market cap was on track to open at $975 billion after a 30% jump in after-hours trading Wednesday. The company reported first-quarter adjusted earnings per share of $1.09, versus a Refinitiv consensus estimate of 92 cents. Its first-quarter revenue of $7.19 billion was significantly above a consensus estimate of $6.52 billion.
But it was the chipmaker's leading position as an AI chip supplier, coupled with it guiding to $11 billion in sales for the current period, that may have sent shares soaring even higher.
The share price rise puts Nvidia within reach of a trillion-dollar valuation, something only a handful of publicly traded companies have ever achieved. Apple was first valued at $1 trillion in 2018 and reached a $3 trillion valuation in 2022. Alphabet, Amazon, Saudi Aramco, Tesla, Meta and Microsoft have all at one point been valued at $1 trillion or more.
Analysts moved rapidly to up price targets for Nvidia after the company reported earnings results. JPMorgan doubled its price target from $250 to $500 and reiterated its overweight rating. "Generative AI and large language/transformer models are driving accelerating demand," JPMorgan analyst Harlan Sur said.
"What can we say other than just WOW," Evercore analyst C.J. Muse wrote in a Wednesday note. Evercore raised its price target from $320 to $500 and reiterated its outperform rating.
Nvidia's meteoric rise in valuation isn't lifting other chipmakers, however. The AI chip craze has been driven by demand for high-powered graphics processing units, or GPUs. The company has been a historic outperformer in the high-performance "discrete" GPU market, especially compared with Intel.
But neither Intel, which has reportedly struggled to handle inventory concerns and recently executed significant cost cuts, nor AMD has been able to achieve the same level of share price growth as Nvidia. Intel shares were up nearly 10% year to date at market close Wednesday; AMD shares were up 67% in that same time.
Nvidia shares are now up 160.6% year-to-date.
— CNBC's Michael Bloom, Robert Hum and Kif Leswing contributed to this report.
Correction: This story has been updated to reflect that Nvidia shares are set to close at an all-time high Thursday. A previous version misstated the day.