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From a market value of $500 billion to over a trillion dollars, NVIDIA only took about 500 days, faster than FAAMG! However, the stock price is not cheap, and the chip manufacturing industry always faces supply chain problems. Can NVIDIA's "journey to a trillion" really last?
Riding the wave of artificial intelligence (AI), chip leader NVIDIA briefly joined the trillion-dollar market value club on the US stock market!
Overnight, NVIDIA opened at more than $405 and rose more than 7% to a historical high of $419, pushing its market value over $1 trillion.
Considering that NVIDIA has a total of 2.47 billion outstanding shares, if it wants to maintain a market value of one trillion dollars, its stock price needs to be above $404.86.
Unfortunately, NVIDIA only closed up 3% to $401.11 overnight, with a market value of around $98.9 billion.
However, it is worth noting that despite this, NVIDIA is still the first chip company to have entered the trillion-dollar market value club on the US stock market, and the seventh "trillionaire" on the US stock market.
So, the new question arises: Can NVIDIA, which has already risen 175% this year, rise further? Can NVIDIA continue to maintain its trillion-dollar level? Or will it repeatedly enter and exit the trillion-dollar club? Or will it fall from grace?
Referring to the performance of "predecessors", Tesla and Meta, which once had a market value of trillions of dollars, are now worth less than $700 billion; while Apple, Amazon, Alphabet-C, and Microsoft, the four big brothers with a market value of more than one trillion dollars, also experienced a short-term decline after briefly reaching a trillion dollars before recovering their upward momentum.
At present, the "danger" for NVIDIA is that its stock price is not cheap, and it is even the third most expensive in the trillion-dollar club - the current stock price is about 51 times the expected earnings in 2024. In contrast, when Apple crossed the trillion-dollar mark, its P/E ratio was only 17 times.
Moreover, unlike Apple and Alphabet-C, NVIDIA's rise is not based on its reputation among consumers; and unlike Amazon and Microsoft, NVIDIA, which mainly produces hardware, will always face the risk of supply chain disruption.
But no matter what, NVIDIA is still a big surprise in the market this year. From a market value of $500 billion to a trillion dollars, it only took about 500 days, about one-third of the time it took Apple to achieve the same, making it the fastest in the elite club.
Image source: Reuters