Key points:

  • The sharp jump in Nvidia shares led to a daily gain in the company’s market capitalization.
  • Nvidia shares closed at $1,037.99, surpassing the psychological threshold of $1,000.
  • Nvidia also announced a 10-for-1 stock split and a 150% increase in its quarterly dividend.

Nvidia‘s forecasts for strong revenue growth bolster investors’ confidence in the chip market’s boom amid the hype around artificial intelligence technologies. The surge in shares of the semiconductor industry leader boosted the company’s market capitalization to a whopping $218 billion in one-day gains, the second-largest one-day gain on Wall Street.

Nvidia’s growth exceeds expectations

Despite high expectations, Nvidia shares have been on a strong run, hitting record highs ahead of its earnings report. The company’s results confirmed the positive dynamics in the sector of US technology giants, where artificial intelligence is becoming a key driver of growth.

ParadTrade also repeatedly covered the dynamics of the company’s shares ahead of the publication of the report and focused on growth. As a result, Nvidia shares closed at $1,037.99, exceeding the psychological threshold of $1,000. The company’s shares are up 110% so far in 2024, more than tripling their performance over the past year.

In addition, Nvidia also announced a 10-for-1 stock split and a 150% increase in quarterly dividends. The decision is also supported by continued demand for the company’s high-performance chips, which are used in virtually all artificial intelligence applications, including OpenAI’s ChatGPT.

Nvidia’s capitalization surge on Thursday rivaled Adobe’s, ranking second after a record $277 billion rise since its previous earnings report in February.

Nvidia’s rise contrasts with the overall decline in the stock market, with the S&P 500 losing 0.7% on the day and shares of the other six “Magnificent Seven” tech giants closing in the red.

Nvidia’s competitors show mixed dynamics

Nvidia’s stock surge on Thursday coincided with Taiwanese contract chipmaker TSMC’s forecast for 10% annual growth in the global semiconductor industry. U.S.-listed shares of TSMC rose 0.6%.

However, other AI-focused companies posted mixed performance despite initial gains following Nvidia’s report. Arm Holdings and Broadcom rose about 0.1%, while Advanced Micro Devices and Super Micro Computer fell about 3%.

Analysts positively assessed statements by Nvidia management that deliveries of new Blackwell AI chips will begin in the current quarter, and demand for processors may exceed supply next year.

Experts also believe the stock split could make Nvidia more attractive to retail investors after interest in the category has waned this year.