Investors seized the opportunity to pick up undervalued shares with a “Buy the dip” sentiment, propelling Nvidia to a new all-time high. A strong forecast from Taiwan Semiconductor (TSMC) reignited Wall Street’s enthusiasm for artificial intelligence (AI), overshadowing concerns about ASML’s sluggish outlook and reports of export restrictions on advanced AI chips to certain Middle Eastern countries.
Nvidia ended the week trading above $138 per share, pushing its market capitalization to $3.39 trillion. The stock maintained a slight gain, up 0.2%, in Monday’s premarket.
Now the world’s second-largest company after Apple, Nvidia’s dominance could soon propel it to the top spot. Industry experts say there’s increasing confidence that the chip giant will be the first major tech firm to hit a $4 trillion valuation.
Nvidia Market Stock | Image: Google Finance | 21st October
In the coming weeks, earnings reports from Nvidia’s fellow “Magnificent Seven” companies will provide investors with more insight into its growing market influence. Meta (META), Amazon (AMZN), Alphabet (GOOG, GOOGL), and Microsoft (MSFT) — which together contribute over 40% of Nvidia’s revenue — have all committed to ramping up AI investments.
Last quarter alone, Meta, Alphabet, and Microsoft spent more than $40 billion on AI, with Amazon projecting its second-half investment to exceed the $30 billion mark from the first half.
Vivek Arya, a BofA analyst who views Nvidia as a “generational opportunity,” points to commentary on capital expenditures from leading hyperscalers as a key factor in Nvidia’s strengthened market position. Arya raised his price target on Nvidia to $190, signaling nearly 40% potential upside from Friday’s closing price.
Arya and his team also highlight Taiwan Semiconductor’s optimistic demand outlook as a bullish sign. TSMC, a key supplier for Nvidia and other tech giants, sparked a sector-wide rally after reporting a 50% surge in net income for the third quarter and forecasting nearly 30% full-year revenue growth.
