The boost of artificial intelligence is already noticeable in company accounts. Nvidia, leader in chips, has presented better prospects than expected due to the pull of AI that has driven it strongly on the stock market, infecting the rest of the sector this Wednesday.
Nvidia achieves a 30% rally after the market close and is catapulted to all-time highs. The increase inflates its capitalization by 200,000 million dollars and brings it closer to a stock market valuation of one trillion dollars, a title that has been within the reach of few firms, such as Apple, Amazon, Microsoft, Alphabet, Saudi Aramco, Tesla or Meta.
The reason is that the market is going faster than expected. “The transformative increase in AI spending is paying off much sooner than expected,” said Joseph Moore, an analyst at Morgan Stanley Joseph Moore. With the voracity for AI solutions and equipment, Nvidia expects its second-quarter revenue to be 50% above what analysts expected. It will enter 11,000 million dollars for the 7,150 million provided by Wall Street. "It's one of the clear winners in generative AI. It's enjoying a very strong business evolution," says Simon Webber, a manager at Schroders.
Nvidia has reallocated productive capacity from PC gaming to AI. "The company is increasing its offer to meet the growing demand for its chips, which power services such as ChatGPT and other similar services," says Sergio Ávila, an IG analyst. "The generative artificial intelligence gold rush should drive demand for Nvidia chips throughout the rest of the year. While its PC gaming chips sell for $1,500, its AI chips cost more than ten times that, about $20,000 each," Avila says.
Nvidia's push has benefited the rest of the industry. In Europe, the shares of the Dutch BE Semiconductor advanced 8%, similar to the pull of its compatriot ASM International. ASML, with a much larger capitalization, was up a little less, at 5%. In Asia, the Taiwanese TSMC -which manufactures for Nvidia- has advanced 3%, the Japanese Advantest, for semiconductor testing, another 16%, and the Korean Hynix 6%. In the pre-opening of the US market, the American AMD also shot up 10%.