Thomson Reuters
- Nvidia has breezed through the banking turmoil, and is the S&P 500's best performer with a 81% rise year-to-date.
- The chipmaker has added $87 billion in market value since Silicon Valley Bank was taken over by regulators.
- "We are at the iPhone moment of AI," CEO Jensen Huang said this week amid the ChatGPT buzz.
For two weeks now, anxiety has run high across global markets as a string of bank implosions — from Silicon Valley Bank in the US and to Credit Suisse in Europe — whipsawed assets from stocks to bonds and commodities.
Experts including Nobel Prize-winning economist Paul Krugman have warned the banking crisis raises the risk of a recession. Earlier in March, equity volatility saw the biggest weekly jump in over a year, while the bond-market equivalent hit all-time highs.
But the best-performing stock on the S&P 500 index has breezed through it all.
Despite the turmoil, the share price of Nvidia has barely budged from the upward trajectory it set at the start of the year. The Santa Clara, California-based chipmaker's stock has surged more than 81% so far in 2023, boosting its market capitalization by $294 billion. It's the top performer on the S&P 500 index this year.
What's more, the company's market cap has jumped $87 billion since March 10, the day Silicon Valley Bank's failure set off the banking turmoil that's still rippling across the financial world.
At about $654 billion, Nvidia is valued almost six times as much as its longtime rival Intel.
Koyfin
Morgan Stanley's analyst Joseph Moore upgraded Nvidia's stock last week to "overweight" and lifted the price target to $304 from $255 previously, according to data compiled by Benzinga. The shares traded at $264.68 apiece at Wednesday's close.
'The iPhone moment of AI'
The rally has been driven chiefly by investor perception that Nvidia is well positioned to take advantage of the ongoing boom in artificial intelligence technologies. The company is the No. 1 producer of graphics chips needed for high-intensity AI computing.
This week, Nvidia founder and CEO Jensen Huang announced partnerships with a number of companies — including Google, Microsoft and Oracle — that are developing AI applications for various industries.
AI technologies have captured popular imagination in recent months, following the huge hype surrounding the human-like language capabilities of OpenAI's chatbot ChatGPT. Global tech behemoths from Google to China's Baidu are now readying their own answers to ChatGPT.
"We are at the iPhone moment of AI," Nvidia's Huang said in his keynote speech at the company's GTC conference. "The impressive capabilities of generative AI have created a sense of urgency for companies to reimagine their products and business models."
DGX Cloud: Supercomputing on subscription
Nvidia unveiled this week an AI-oriented supercomputing service that would be available on a subscription basis to any business.
The product, named DGX Cloud, is "an AI supercomputing service that gives enterprises immediate access to the infrastructure and software needed to train advanced models for generative AI and other groundbreaking applications," according to a company statement Tuesday.
Among S&P 500 stocks, the 81% year-to-date rally in Nvidia is followed by a 66% gain for Meta Platforms and a 55% advance in Tesla. Rival chipmaker AMD has gained 51% so far in 2023.