After experiencing a 50% drop in 2022, data center and chip behemoth Nvidia is staging a stunning stock market recovery this year. The company’s shares jumped 3.5% in premarket on Tuesday, meaning the stock is set to hit a $1 trillion market cap at today’s market open for the first time.

Nvidia’s Shares Up 165% in 2023

Shares of Nvidia are up 3.5% in premarket trading Tuesday, standing at $403 at the time of writing. If this price level holds through the market open, it will mark the first time Nvidia’s market valuation exceeds $1 trillion. The stock closed at $389.46 per share on Monday after climbing more than 2.5%.

With the current gains in the premarket, the tech giant’s shares have surged roughly 165% in 2023, indicating a jaw-dropping rebound following a tumultuous 2022. A considerable portion of Nvidia’s share price increases came last week when the company published its Q1 2023 results that beat analysts’ estimates.

According to the report, Nvidia generated $7.19 billion in revenue in the first quarter, smashing consensus projections of $6.52 billion. The company reported adjusted earnings per share (EPS) of $1.09, topping the expected 92 cents per share.

But the report’s highlight was Nvidia’s sales forecast, with the chipmaker saying it expected sales of around $11 billion in the current quarter, more than 50% higher than analysts’ estimates of $7.15 billion.

AI Boom Leads to Nvidia’s Homerun

While Nvidia has been one of the leading companies in the data center and gaming markets for years, its impressive sales growth and stock market display are largely driven by the ongoing artificial intelligence (AI) frenzy. The remarkable success of ChatGPT in recent months sparked immense interest in AI technologies, which has led to a surge in demand for Nvidia’s cutting-edge chipsets.

Still, it appears that the supply cannot keep up with the current demand for advanced graphics processing units (GPUs) used to power AI solutions. As a result, many firms from this industry are resorting to their connections to gain access to more chips.

Meanwhile, even though NVDA is having a record-breaking year, not all investors and market watchers are bullish on the tech company’s stock. On Monday, ARK Innovation manager Cathie Wood said Nvidia was “priced ahead of the curve,” adding that other companies, including Elon Musk’s Tesla, are also set to benefit from the current AI mania.

This article originally appeared on The Tokenist

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.