Nvidia's stock soars 25%, surpassing Microsoft in market cap and trailing only Apple, fueled by AI growth expectations

Nvidia's stock soars 25%, surpassing Microsoft in market cap and trailing only Apple, fueled by AI growth expectationsOn October 10th, Nvidia's stock price surged by 25% in the past month, nearing its all-time high and surpassing Microsoft to become the second most valuable company, trailing only Apple. This surge is attributed to the booming AI market and Nvidia's leading position as a key player in this field

Nvidia's stock soars 25%, surpassing Microsoft in market cap and trailing only Apple, fueled by AI growth expectations

On October 10th, Nvidia's stock price surged by 25% in the past month, nearing its all-time high and surpassing Microsoft to become the second most valuable company, trailing only Apple. This surge is attributed to the booming AI market and Nvidia's leading position as a key player in this field.

From late August to early September, Nvidia's stock experienced a brief but significant decline before rebounding quickly. On Wednesday, Nvidia shares closed slightly lower at $132.65, just below its all-time high of $135.58 reached in June.

Nvidia is one of the biggest beneficiaries of the AI boom, as companies like Meta, OpenAI, Alphabet, Microsoft, and Oracle are constantly introducing technologies and products that require significant investments in their GPUs. In August, Nvidia reported a 122% year-over-year increase in revenue and a doubled net profit of $16.6 billion for the second quarter. The company also provided an optimistic forecast for the third quarter, stating that shipments of its new Blackwell architecture AI chips are expected to reach billions of dollars. Due to strong market demand, Nvidia expects shipments of its Hopper architecture chips currently available in the market to continue growing in the next two quarters.

In a report on Wednesday, analysts at Mizuho Securities Japan said, "We believe Nvidia will remain the leader in data center AI training and inference chips." They expect Nvidia to hold approximately 95% of the market share and have set a target price of $140. However, they also highlighted risks such as potential escalation of export restrictions and a significant decline in AI server spending.

"Everyone wants to have the most chips, everyone wants to get ahead," said Nvidia CEO Jensen Huang in an interview last week, commenting on the "crazy" demand for Blackwell chips. He stated that each GPU costs between $30,000 and $40,000 to produce and production capacity is expected to increase in the fourth quarter and continue through fiscal 2026.

Other factors have also contributed to Nvidia's stock rise over the past month. On September 23, Nvidia's stock price jumped 4% after filings showed Huang had completed a sale of company stock.

Over the next few weeks, as tech companies release their earnings reports, major Nvidia clients like Meta, Microsoft, and Alphabet will provide updates on their AI investment expectations to shareholders. These expectations will directly influence investors' perceptions of Nvidia's future prospects and could further drive its stock price.

It is important to note that the future of AI technology remains uncertain. In addition to concerns about chip production costs and export restrictions, ethical risks, data security, and privacy issues related to AI also need to be addressed effectively. As AI technology continues to evolve, Nvidia's future success will depend on its ability to innovate, expand its market reach, and manage risks.