Nvidia surges to record $277b market cap in single day, riding AI ‘FOMO’ wave
Nvidia, a leading chipmaker, shattered records by achieving the largest single-session market capitalization increase for a publicly listed company.
The company witnessed an astonishing 16.4% surge in its share price, propelling its valuation by a staggering $276.7 billion, surpassing the market capitalizations of both Advanced Micro Devices and Bank of America, falling just shy of Nestle’s valuation by approximately $9 billion.
This remarkable feat eclipsed the previous record set by Meta earlier in the month, marking a significant milestone in market history, the Financial Times reported.
“Semiconductor rally, driven by Nvidia’s blowout earnings, has produced an AI generated nightmare for short sellers as they are down $4.3 billion in one day mark-to-market losses, down -7.26%. Nearly two-thirds of these losses were the $2.8 billion of losses for Nvidia shorts,” said Ihor Dusaniwsky Managing Director of Predictive Analytics, S3 Partners.
Trading activity surrounding Nvidia was notably robust, with traders exchanging $65 billion worth of Nvidia shares on Thursday, constituting almost a fifth of all trading in S&P 500 stocks.
Nvidia’s remarkable one-day market value increase also marked the largest in Wall Street history, outpacing Meta Platforms’ record gain of $196 billion on February 2nd.
Impressively, the surge in Nvidia’s market value even exceeded the entire market value of Coca-Cola, which stands at $265 billion.
“All of that keeps us positive on the opportunity, and with the rally in other compute names with AI exposure, NVIDIA actually becomes easier to rationalize. In terms of our (price target) we maintain our target multiple of 35x MW EPS, which brings our (price target) up to $795 from $750 previously,” said Joseph Moore, Equity Analyst at Morgan Stanley.
Nvidia’s dominance in the high-end AI chip market, accounting for approximately 80% of market share, injected new vigor into the ‘FOMO’ AI trade and contributed significantly to the broader stock market rally.
The positive momentum extended to Thursday’s trading session, where the S&P 500 surged by 2.11% to reach 5,087.03 points. The Dow Jones Industrial Average also experienced a notable uptick, rising by 1.18% to close at 39,069.11 points, marking its first close above the 39,000-point threshold.
Similarly, the Nasdaq Composite recorded a significant increase of 2.96%, closing at 16,041.62 points. The optimism in the U.S. market spread to Asian stocks, which followed the upward trajectory set by Wall Street.