AI chipmaker, Nvidia, made a record single-day jump on the last day of July, pushing its market capitalization by $330 billion. Previously, Nvidia added $277 billion in a one-day record surge back in February, as per market reports.
The double-digit rise was reportedly fueled by the strong demand for its chips as the “Magnificent Seven” companies queue to announce quarterly results. The “Magnificent Seven” stocks include major tech companies that have been key drivers in artificial intelligence like Apple (AAPL), Microsoft (MSFT), and Alphabet (GOOGL). Nvidia (NVDA) is also part of the group, but this time around, the major driver was MSFT.
MSFT surge drives NVDA stock prices
On July 30, Microsoft revealed an increased AI-related capital spending for the 2024 fiscal year. The spending surged by 60% to reach $69 billion, channelled towards expanding the company’s cloud and artificial intelligence infrastructure. With a 21% increase in revenue year-on-year, Microsoft’s Cloud business reported a quarterly revenue of $36.8 billion.
Chart of the day from Deutsche Bank.
Nvidia today v. Cisco Systems 24 years ago.
I'm not saying but I'm not, not saying.
For the kids out there, Cisco was seen as the big winner for the entire creation of the internet. pic.twitter.com/gSN7cWP45k
— Brian Sullivan (@SullyCNBC) July 31, 2024
In response, AI chipmaker, Nvidia, reached a market valuation of $330 billion on July 31. Its previous single-day record was earlier in February 2024 when Nvidia added $277 billion to its market cap. The massive surge in Nvidia’s market cap has been closely tied to the booming AI industry.
Nvidia sees continued investments amid big tech stock selloffs
Nvidia’s market momentum has reportedly caught the attention of major investors, including former speaker of the United States House of Representatives, Nancy Pelosi. According to reports, Pelosi bought 10,000 shares of Nvidia on July 26, valued at $1 million-$5 million. On the same day, Pelosi also sold 5,000 Microsoft shares. Techcrunch recently reported that Google Cloud is providing Y Combinator startups with subsidized access to Nvidia GPUs and Google TPUs.
Nvidia just gained $329 billion in market cap.
It's the biggest one-day gain in stock market history. pic.twitter.com/1BsRaZFDFY
— Fintwit (@fintwit_news) July 31, 2024
Before Microsoft’s earnings report, there were concerns that the upside expectations for AI-related companies were too high. Per Daniel Newman, Futurum Group CEO, “large amounts have left big tech businesses because of the sharp increase in their stock values.” In addition to this sector’s peculiarity, along with ongoing economic uncertainty, geopolitical challenges, and concerns about China, Nvidia’s share price might fluctuate as per a recent Financial Times report.