1 of 2 | Jensen Huang, founder and CEO of Nvidia Corp, said the computing industry is going through profound changes in technology, led by developments in artificial intelligence. The chip maker beat analyst expectations in its first quarter earnings report. File photo by Laura Cavanaugh/UPI | License Photo
May 25 (UPI) -- Chip-maker Nvidia was marching toward a trillion-dollar market cap Thursday amid a sea change in computing technology.
Shares of the company were up 26% as of noon Friday as its market value was near $974 billion after closing at $755 billion on Wednesday.
"A trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process," said Jensen Huang, founder and CEO of the chip maker.
Apple became the first company to reach a trillion-dollar market cap in 2018 and was later joined by Microsoft, Amazon and Alphabet.
The surge toward the exclusive club came as Nvidia reported a 19% increase in first-quarter profits from the prior term on Wednesday.
Nvidia's Huang said with its entire family of products in full production, the race is on to meet the surge in demand of advanced computing technology.
"The computer industry is going through two simultaneous transitions -accelerated computing and generative AI," he said Wednesday.
AI systems such as ChatGPT require thousands of chips to complete the machine learning required to prep the systems over extended periods of time.
Competition in the tech sector, meanwhile, is fierce given the recent advances in artificial intelligence. Google in April released information on its new AI supercomputer, saying it is more powerful than Nvidia, its main competitor.
According to Google researchers, its TPU v4 supercomputer, is "1.2x-1.7x faster and uses 1.3x-1.9x less powerful than the Nvidia A100."
While Google creates and conducts research on AI systems Nvidia dominates about 90% of the market.
Ruben Roy, a managing director for equity research at Stifel Financial Corp. in New York, told Yahoo Finance that Nvidia is in the "sweet spot" of the AI game given that its first quarter results beat market expectations.
The broader NASDAQ was up 1.3% Thursday, bucking broader market trends amid concern about a possible default on U.S. debt obligations.
"The NASDAQ is rallying as Nvidia's outlook bolstered bets that AI will be the key to mega-cap tech's growth story," Ed Moya, a senior market analyst at New York brokerage OANDA, said in an emailed note.