Top Line
Chip-making giant Nvidia continued Tuesday's market rally, which led chip stocks to surge in off-hours trading on Wednesday, helping it surpass Microsoft as the world's most valuable public company and boost CEO Jensen Huang's net worth.
Nvidia chief Jensen Huang's net worth has grown alongside the company's market capitalization.
Important Facts
On Wednesday morning, when major US markets were closed to celebrate Juneteenth, Nvidia shares rose about 0.6% to more than $136.
The surge comes after Nvidia's stock hit an all-time high on Tuesday, trading at $135.58 at market close, a jump of more than 3.5%.
Nvidia's surge also lifted shares of other chip stocks overnight, primarily in Asia, where some of the world's biggest tech makers are based, including some of Nvidia's biggest competitors.
Shares of chip rivals such as Taiwan Semiconductor Manufacturing Co (TSMC), another big beneficiary of the AI boom, rose more than 4% by market close in Taipei, with Hong Kong-listed Chinese maker Hua Hong Semiconductor and Semiconductor Manufacturing International Corp also gaining 0.4% and 1%.
Shares of South Korean chipmakers Samsung Electronics and SK Hynix rose as much as 3% and 7%, respectively, during trading hours, but lost those gains as the day progressed and were down 1.75% and 0.43%, respectively, by market close in Seoul.
Shares of U.S. chipmaking giants were largely steady during trading on Wednesday, with Arm Holdings (ARM) and Micron Technology (MU), which rose nearly 9% and 4% on Tuesday, closing with modest gains of 0.34% and 0.81%, respectively, and Intel, which was down more than 1% on Tuesday, remaining relatively steady.
tangent line
Shares of Hon Hai Technology Group, better known as Foxconn, also surged following Nvidia's rally. The Taipei-listed stock was up more than 2% at market close on Wednesday. The Taiwanese giant has partnered with Nvidia to build a specialized set of AI data centers using the US giant's chips to develop a variety of AI applications, including robotics platforms, electric vehicles and large language models (LML).
How quickly has Nvidia gone from being a gaming chip maker to an AI giant?
Nvidia on Tuesday regained the title of the world's most valuable public company, overtaking tech giant Microsoft just weeks after snatching second place from iPhone maker Apple. The achievement marks Nvidia's journey from a respected maker of video game hardware to a provider of one of tech's most sought-after commodities: specialized AI chips. The turn has seen Nvidia dramatically change its fortunes in just a few years, growing from a market capitalization of about $16 billion in 2016 to nearly $800 billion by the end of 2021, before falling to about $300 billion in 2022 due to poor demand for gaming chips and a broad decline in US stock markets. A boom in generative artificial intelligence triggered by the release of OpenAI's ChatGPT in late 2022 has helped propel Nvidia to new heights as demand for its specialized AI chips has soared. Since then, the company's value has soared from about $400 billion at the end of 2022 to $1 trillion by mid-2023, $2 trillion by early 2024, and $3 trillion by mid-2024. Nvidia shares are up more than 170% this year alone and its stratospheric rise shows no signs of stopping as tech firms duel it out to dominate the nascent market for AI.
Forbes Evaluation
The AI boom has not only catapulted Nvidia to a rarefied position of wealth and power. CEO Jensen Huang, who co-founded the chipmaker in 1993, has also seen his wealth grow astronomically in recent years. After a recent surge in Nvidia stock, Forbes estimates Huang's wealth at $118.7 billion, rising by $4 billion on Tuesday alone. He is now the 11th richest person in the world, ahead of Indian billionaire Mukesh Ambani and about $12 billion away from entering Forbes' ranking of the top ten richest people in the world. He trails Microsoft billionaire Steve Ballmer, who owns the Los Angeles Clippers, and Bill Gates, who are worth $130.6 billion and $133.5 billion, respectively.
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