Nvidia’s $250B Surge Lifts S&P 500 to Record High

Nvidia, the AI chip giant, achieved a record valuation on Thursday after surpassing Wall Street’s expectations in its highly anticipated earnings report. This surge not only propelled Nvidia’s stock to an all-time high but also boosted major stock indexes to their highest levels ever.

Nvidia’s stock price surged by more than 16% to close at over $780, resulting in a valuation increase of just over $250 billion. This performance was driven by Nvidia’s impressive earnings report, which exceeded analysts’ estimates across the board.

The impact of Nvidia’s performance extended beyond its own stock, influencing the broader market sentiment. The benchmark S&P 500 index rose by more than 2% to reach a record high of nearly 5,100, while the tech-heavy Nasdaq jumped by more than 2%. Even the Dow Jones Industrial Average, which does not include Nvidia among its 30 members, climbed by more than 1% to a record high of over 39,000.

Notably, Nvidia’s market capitalization increase of more than $250 billion on Thursday stands as the largest single-day valuation gain for any public company on record, according to Bloomberg. This milestone surpasses the previous record set by Meta (formerly Facebook) earlier in the month, when its market cap increased by nearly $200 billion following its fourth-quarter earnings report.

Nvidia’s strong financial performance was driven by its impressive revenue and profit growth. The company reported $22 billion in sales and $13 billion in net income for the quarter ending last month, significantly exceeding analyst estimates. This growth was fueled by Nvidia’s Datacenter segment, particularly its graphics processing units (GPUs) used in generative AI, which saw a revenue increase of 409% on an annual basis to $18.4 billion last quarter.

Investor and corporate interest in AI has been a key driver of Nvidia’s stock price, which has seen a nearly 500% gain since October 2022. This growth has outpaced that of any other S&P constituent, contributing to the index’s overall recovery of more than 40% from its October 2022 bottom.

Bernstein analyst Stacy Rasgon described Nvidia’s performance as “remarkable” and noted that the company is “printing money at this point.” He also expressed confidence in Nvidia’s future growth prospects, highlighting the solid foundation on which the company’s success is built.

In summary, Nvidia’s exceptional performance not only set records for the company itself but also had a significant impact on the broader stock market, underscoring the company’s importance in the tech and AI sectors.