NVIDIA touches a $1 trillion valuation

NVIDIA’s shares rose roughly 4% in early trading on 30 May 2023, pushing its market capitalisation to just over $1 trillion for the first time — making it the sixth publicly traded company to reach that valuation, after Apple, Saudi Aramco, Microsoft, Alphabet and Amazon. The stock gave back some of the gain later in the session and closed just below the threshold.

The move was driven by the company’s own guidance rather than by market sentiment about AI generally. NVIDIA’s earnings report six days earlier had forecast quarterly profit roughly double what analysts had expected, attributed explicitly to demand for its data-centre chips from companies training large AI models. By 30 May, the stock was up more than 175% for the year, far outpacing a broader tech rally in which mega-cap stocks had also risen sharply.

The milestone mattered less as a single day’s number — NVIDIA would cross $1 trillion again and go on to far larger valuations in the following two years — than as an early, unambiguous market signal about where the money in the AI boom was actually flowing. ChatGPT and the model releases that followed it had driven public attention to language models and chatbots; NVIDIA’s earnings showed that the more immediate and measurable beneficiary was the infrastructure underneath them, the H100 GPUs and data-centre systems that every lab building a large model needed to buy, largely from a single supplier. Commentators at the time noted that this made NVIDIA, rather than any AI lab, the company best positioned to profit regardless of which model or which application ultimately won.