AI chip maker Nvidia is valued at $2 trillion

Photo by BoliviaInteligente on Unsplash

 The Silicon Valley company's stock rose more than 4% in Friday morning trading but has since retreated slightly. Stocks continued to rise following the company's blockbuster financial results this week. The company is benefiting from advances in artificial intelligence (AI) that are stimulating demand for its chips.

The company's revenue more than doubled last year to more than $60 billion, and boss Jensen Huang told investors this week that global demand was "increasing."

The company, which was valued at less than $1 trillion a year ago, is now the fourth most valuable publicly traded company in the world after Microsoft, Apple and Saudi Aramco.

The stock has retreated from early Friday highs, and the company ended the day with a market value of just under $2 trillion. Nvidia was founded in 1993 and was initially known for manufacturing computer chips that processed graphics, especially for computer games.

Long before the AI ​​revolution, the company began adding features to its chips that appeared to support machine learning, and those investments have helped it gain market share.

The company is now considered a key player to watch for how quickly AI-powered technology will spread throughout the business world. The price of the company's stock has more than tripled in the past 12 months, rising from less than $240 a share to nearly $800 in midday trading Friday.

On Thursday, the day after the earnings report, buyers added $277 billion to Wall Street's value, the largest single-day gain on Wall Street in history.

The report also appears to convince investors that the AI ​​boom is "living up to the hype," as Hargreaves Lansdown's Deren Nathan put it, and that the broader It's helping fuel the market's rise.

"It's used in the automotive industry for design purposes, in telecommunications for network planning, and in mainstream enterprises to find data and gain insights that weren't possible before," said Bob O'Donnell.

"This is now really starting to impact the entire group of companies, not just specialized technology companies, and this is a real transformation for the industry."