Here’s Why NVIDIA Corporation (NVDA) Shares Skyrocket by 36.3% in May

NVIDIA’s impressive share surge in May brings it closer to a $1 trillion market cap.

What happened

NVIDIA Corporation (NASDAQ: NVDA) experienced a significant surge in its shares, climbing by 36.3% in the month of May. This remarkable jump has propelled NVIDIA’s year-to-date gain to an impressive 164.3%, bringing the chipmaker closer to reaching a market capitalization of $1 trillion.

So what

NVIDIA recently released its fiscal 2024 first-quarter earnings report, which showcased a mixed set of results. Although the company’s revenue declined by 13% compared to the previous year, it still managed to record a 19% increase from the previous quarter. This increase brought the revenue to $7.2 billion.

Operating expenses, on the other hand, decreased by 30% year over year, leading to a noteworthy 26% year-over-year jump in net income, amounting to $2 billion. Furthermore, NVIDIA’s free cash flow skyrocketed by an impressive 94.4% from $1.37 billion to $2.66 billion.

However, it was NVIDIA’s second-quarter guidance that truly impressed investors. The company expects revenue to reach around $11 billion, plus or minus 2%, marking a substantial increase from the $6.7 billion generated in the same quarter last year. This forecast surpassed analysts’ expectations of $7.2 billion. Jensen Huang, founder, and CEO of NVIDIA, highlighted the pivotal role of accelerated computing and generative artificial intelligence (AI) in driving the industry to new heights.

Huang, who recently delivered his first keynote speech in almost four years, expressed his excitement about these two emerging technologies and their potential to revolutionize computing. He highlighted that accelerated computing and generative AI would not only create new business models but also enhance the efficiency of existing ones. Huang further stated that the trillion-dollar global data center industry will increasingly adopt accelerated computing. This adoption will occur as generative AI becomes integrated into various products, services, and business processes. Consequently, the demand for a vast number of microchips in data centers, gaming, and other sectors will surge.

Now what

NVIDIA’s focus on AI has generated a wave of optimism and excitement in the industry, showcasing the potential of this technology to revolutionize computing and gaming. Accelerated computing is expected to permeate numerous aspects of life, including the metaverse, gaming, healthcare, financial services, and logistics.

Looking ahead, NVIDIA envisions a total addressable market of nearly $1 trillion. The company plans to tap into this market by developing new microchips for industries such as automotive, gaming, and omniverse enterprise software. With a promising future ahead, NVIDIA is gearing up for further growth and innovation.