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Nvidia Takes the Market by Storm Nvidia Market Cap Nears $2 Trillion: Why ‘Tech Giant’ Has Become An Understatement

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Nvidia has experienced an electrifying surge in its market cap, soaring from $1.67 trillion to $1.91 trillion in the blink of an eye, leaving investors in a state of frenzy as fresh buying of the stock took precedence. The tech world has been hailing Nvidia Corporationโ€™s (NVDA) spellbinding performance over the past couple of years, and just in the last two days, the drama has unfolded.

This week witnessed a 7% drop in the stock as investorsโ€™ anxiety loomed before Wednesdayโ€™s post-market results, triggering some profit-taking. Would Nvidia once again defy market expectations with its quarterly earnings, or was this the moment it would fall short?

In a sell-the-rumor, buy-the-fact moment, the company exceeded market forecasts, rebounding from a 2.9% dip on Wednesdayโ€™s session at $674.72. After-hours trading on Wednesday, and pre-market trading on Thursday witnessed a staggering 14% rally, propelling the shares above $700.

Also Read: Can Nvidia Join Apple, Microsoft In $2-Trillion Club Today? Hereโ€™s How Much The Stock Needs To Gain To Hit The Mark

Big Tech, Big Moves

Letโ€™s contextualize these moves with insight from the Kobeissi Letter on X on Thursday. S&P 500 futures underwent a 1.5% reversal following the marketโ€™s reaction to Nvidia earnings. Since 3pm ET on Wednesday, the S&P 500 has added $600 billion in value, with Nvidia itself contributing around $220 billion to that surge.

In fact, โ€œNvidia is now just 20% smaller than the entire combined value of Germanyโ€™s stock market. Tech giant is an understatement,โ€ observed the analyst.

The post- and pre-market movements of other tech behemoths added to the weight. Microsoft Corporation (MSFT), boasting a $3 trillion market cap, saw a 1.7% surge, while Apple Inc (AAPL), with a $2.8 trillion market cap, experienced gains over the two days.

Big Tech, Big Influence

Given the magnitude of these shifts, investors are left pondering whether the market could sustain its rally without the presence of tech stocks. Their weightings and influence on the overall market are undeniable. If they falter, the S&P 500 falters, and investor confidence wanes, paving the way for possible market corrections.

A loss of confidence among investors can swiftly trigger a sell-off across the board, extending its influence beyond just the U.S. markets.

โ€œThe post-close rally in U.S. tech stocks after Nvidiaโ€™s earnings has fueled risk-on activity today. Japanโ€™s Nikkei 225 index closed at record highs on Thursday with a 2.2% rally,โ€ shared Marc Chandler at Bannockburn Global Forex.

Could a weak report from one of the Mega-techs be the catalyst for a downturn? Perhaps Nvidia itself? Unlikely. The company has surpassed market expectations in 12 out of the last 13 quarters, according to Zacks.

Moreover, investors are enamored with the stock. Just last week, it was reported that hedge fund Tudor Investment increased its stake in Nvidia from 14,000 to 132,000 shares โ€” giving it a total holding worth $100.6 million.

Now Read: Broadcom, The Magnificent 7 Stock In Waiting: Can The Chipmaker Replace EV Carmaker Tesla?

Photo: Shutterstock


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