From Nasdaq: 2024-06-05 21:21:10

Nvidia’s stock hit a milestone by reaching a $3 trillion market cap, making it the third US company to achieve this feat. The chipmaker’s success is driven by the rise of AI and generative AI, which has increased demand for its data center chips. Nvidia’s revenue has surged, and a stock split is on the horizon.

Investors believe Nvidia will surpass Microsoft in market cap due to its continued success in AI technology. CEO Jensen Huang’s foresight to pivot towards AI years ago has paid off, with Nvidia’s revenue and net income skyrocketing. The company’s stock price has increased significantly, and a 10-for-1 stock split is expected to boost growth even further.

Nvidia’s revenue for the fiscal 2025 first quarter soared to a record $26 billion, with earnings per share reaching $5.98. The data center segment, which includes AI processors, saw a 427% revenue increase due to high demand for AI chips. Despite concerns about the AI market, projections suggest significant growth potential for Nvidia.

Investors should focus on Nvidia’s operating and financial results rather than its market cap to gauge future prospects. While the stock price may seem high, Nvidia’s triple-digit growth and PEG ratio indicate undervaluation. Competition in the AI market exists, but Nvidia’s strong position and ongoing innovation make it a compelling investment choice.



Read more at Nasdaq: Nvidia Hits a $3 Trillion Market Cap Ahead of Its 10-for-1 Stock Split. Here’s What’s Next for Investors.