Nvidia became the third biggest US company by market value on Wednesday (Feb 14). It makes chips for artificial intelligence computing. Many companies requires these chips and the stock price went up 231 per cent in one year to US$1.812 trillion.
Nvidia is the best performing stock in the S&P 500 this year. It went up 50 per cent and passed Amazon.com. It is now one of the Magnificent Seven stocks.
Analysts think Nvidia will make US$11.38 billion in profit in the fourth quarter. That is more than four times more than last year. Its revenue will also increase more than three times to US$20.37 billion.
Nvidia’s stock price is very high compared to its expected earnings. It is higher than the average for its industry. This means the stock may not go up much more because it already reflects its earnings potential.
