Nvidia's capitalization increased the most in the history of US stocks

Investors' expectations for AI chip demand sent Nvidia shares soaring, adding $330 billion to the company's market capitalization in one session.

At the close of trading on July 31, shares of US chipmaker Nvidia rose nearly 13%, raising the company's market capitalization by $330 billion. This was the strongest one-day increase in Wall Street history, surpassing the company's own record set in February with $277 billion.

Investors expect demand for Nvidia’s advanced chips to remain strong after Microsoft reported a record 78% jump in capital expenditures in the second quarter to $19 billion. Microsoft said it needed to expand its global data center network to meet AI demand.

"Microsoft accounts for 20% of Nvidia's demand for cutting-edge AI chips. The company's increased investment is good news for Nvidia," said Kathleen Brooks, research director at XTB.

Nvidia logo at Computex 2024 exhibition on June 4 in Taiwan (China). Photo: Khuong Nha

Nvidia is currently valued at $2.88 trillion and is the third most valuable company in the world, after Apple and Microsoft. The company's highest market capitalization was $3.34 trillion on June 18. The company currently controls about 80% of the high-end AI chip market.

On July 31, chipmaker AMD also forecast a record $4.5 billion in AI chip sales this year, sending its shares up 4% yesterday.

The global AI race is getting more expensive. Last week, Alphabet reported a bigger-than-expected increase in capital expenditures in the second quarter to support its artificial intelligence technology.

“The current macro environment remains difficult. AI is becoming more mainstream, but it requires significant investment. This is clearly reflected in corporate balance sheets,” said Rishi Jaluria, an analyst at RBC Capital Markets.

Tech companies are expected to report strong results this quarter, with analysts predicting that profits for tech companies in the S&P 500 will increase 10% year-over-year.

Ha Thu (according to Reuters)

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