Nvidia stock soared, making it the world's most valuable company again due to its dominance in AI chips

Nvidia's recent surge in stock price has reinstated its position as the world's most valuable company, with a market capitalization reaching $3.77 trillion . This remarkable growth can be largely attributed to investor confidence in Nvidia's leadership within the artificial intelligence (AI) sector. Despite facing challenges such as Chinese export controls, the company's innovations and strategic positioning have solidified its dominance in AI chip manufacturing, particularly through its powerful GPUs that are essential for advanced AI applications like ChatGPT .

The AI chipmaker’s stock has seen a significant upswing following its first quarter earnings in late May, which featured revenue that beat Wall Street’s expectations and showed the company continuing to thrive despite a new export ban on sales of its chips to one of its largest markets: China.

Loop Capital believes that spending on generative AI compute—driven by hyperscalers, sovereign AI projects, and rising AI factory demand—could grow to $2 trillion by 2028. While the number may seem bold, analyst Baruah said that “the math just works.” He pointed to a steady ramp-up in investments from cloud giants and governments, which puts Nvidia in a strong position to benefit.

Fueling the optimism is Nvidia’s new Blackwell chips, which are set to reach full production volume by the October quarter. These chips are made for advanced AI tasks, especially reasoning models, which need much more power than earlier AI models.

There’s another forthcoming rule that will expand export restrictions on AI chips, Trump administration officials previously said.

Still, in its earnings report in May, Nvidia reported a 69% increase in year-over-year revenue, powered by a 73% surge in its data center business. For the full fiscal year, analysts are expecting 53% revenue growth to almost $200 billion, according to LSEG.

Analysts have heralded this moment as the beginning of an "AI Golden Wave," predicting significant adoption of AI technologies across various industries. Nvidia stands at the forefront of this transformation, capitalizing on increasing demand for high-performance computing solutions. The company's sales trajectory indicates not only current success but also sustained growth potential as it explores new markets such as robotics . This multifaceted approach positions Nvidia favorably for future advancements in technology and profitability.

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Sara H

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