The rally in chip stocks continued on Wednesday, driven by Nvidia’s surge after the AI boom propelled it to become the world’s most valuable company. Nvidia’s shares rose by around 0.6% to over $136 during out-of-hours trading on Wednesday morning, following a 3.5% increase on Tuesday that saw the stock reach an all-time high of $135.58 at market close.
Other chip stocks also saw gains, particularly in Asia, home to some of the largest tech manufacturers and Nvidia’s competitors. Taiwan Semiconductor Manufacturing Company (TSMC), a major beneficiary of the AI boom, saw its shares surge by more than 4% by market close in Taipei. Hong Kong-listed Chinese manufacturers Hua Hong Semiconductor and Semiconductor Manufacturing International Corp also experienced gains of 0.4% and 1% respectively.
South Korean chipmakers Samsung Electronics and SK Hynix saw their shares jump by as much as 3% and 7% respectively during trading hours, although these gains moderated later in the day, with Samsung up 1.75% and SK Hynix down 0.43% by market close in Seoul.
In contrast, shares of U.S. chipmaking giants remained relatively flat during out-of-hours trading, with Arm Holdings (ARM) and Micron Technology (MU) up by 0.34% and 0.81% respectively, and Intel showing little movement after a 1% drop on Tuesday.
The rally also had a positive impact on Hon Hai Technology Group, known as Foxconn, which closed more than 2% higher on Wednesday. Foxconn has partnered with Nvidia to build specialized AI data centers using Nvidia’s chips for various applications including robotics platforms, electric vehicles, and large language models.
Nvidia’s remarkable growth from a gaming chipmaker to an AI giant has been swift. The company’s market capitalization has soared from around $16 billion in 2016 to nearly $800 billion in 2021 before dropping to around $300 billion in 2022. However, the boom in generative artificial intelligence, fueled by the release of OpenAI’s ChatGPT in late 2022, has propelled Nvidia’s value to new heights. The company’s market cap has since surpassed $3 trillion, with its shares up over 170% this year alone.
This surge has not only made Nvidia the world’s most valuable public company but has also significantly increased CEO Jensen Huang’s wealth. Huang, who co-founded Nvidia in 1993, is now estimated to be worth $118.7 billion, making him the 11th richest person in the world.
Overall, Nvidia’s rapid ascent and the broader boom in AI have reshaped the landscape of the tech industry, with the company’s specialized AI chips playing a crucial role in driving its growth and market dominance.
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