By Adam Clark
Nvidia, the leading chip maker, experienced a rise in share prices today as the tech sector recovers from the shock of higher-than-expected inflation. In premarket trading, Nvidia shares were up 1.6% at $732.48.
Although the stock closed down 0.2% at $721.28 on Tuesday after reaching a record high the previous day, Nvidia managed to overtake Amazon to become the fourth-largest U.S. company amid the pressure faced by the tech sector due to an inflation reading for January.
According to Dow Jones Market Data, Nvidia’s market value at the close on Tuesday was $1.78 trillion, surpassing Amazon’s $1.75 trillion. This marked the first time since April 2002 that Nvidia’s market cap exceeded Amazon’s. In premarket trading, Amazon was up 0.8%.
Investor attention is now on Nvidia’s upcoming earnings report on Feb. 21. UBS analyst Timothy Arcuri predicts that Nvidia will report revenue of around $23 billion, surpassing Wall Street consensus of just over $20 billion. Arcuri also highlighted Nvidia’s progress in resolving its supply issues, enabling faster delivery of its graphics processing units.
Arcuri stated in a research note on Tuesday, “Demand for AI compute capacity is still so strong, in the near term, we think this just points to significant upside potential to shipments/revenue.”
As a result, the UBS analyst raised his target price on Nvidia to $850 from $580 and maintained a Buy rating on the stock. This new target is based on a price-to-earnings multiple of 25 times Nvidia’s projected earnings for 2025.
Nvidia’s rise in market capitalization aligns with other chip makers in the industry. Advanced Micro Devices saw a 1.4% increase in premarket trading, while Intel rose by 0.6%.
Over the past month, Nvidia shares have surged by 29% up until Tuesday’s close. In comparison, the S&P 500 index experienced a 3.9% increase, and the Nasdaq Composite Index recorded a 5.4% gain.
