Nvidia adds more than $250 billion in value in one day to smash record

Wall Street records were smashed on Friday as “one of the quickest rises in corporate history” left one man $10 billion richer.

Nvidia CEO Jensen Huang had a good day at the office. Picture: AFP PHOTO / Mandel Ngan

American businessman Jensen Huang surged up the list of the world’s richest people after adding $10 billion to his net worth on Friday (AEDT).

The CEO of AI chipmaker Nvidia was the biggest individual winner as his company added more than $250 billion in stock market value – the largest one-day gain in Wall Street history.

Described by Goldman Sachs’ trading desk as “the most important stock on planet Earth”, Nvidia’s surge had a staggering impact on global markets.

The Dow Jones index finished above 39,000 for the first time, finishing at 39,069.11, up 1.2 per cent. The broadbased S&P 500 jumped 2.1 per cent to 5,087.03, also a record, while the tech-rich Nasdaq Composite Index surged 3.0 per cent to 16,041.62, leaving it about 15 points short of an all-time high.

The Wall Street Journal declared Nvidia is enjoying “one of the quickest rises in corporate history” after its shares surged 16.4 per cent, lifting its market value to almost $2 trillion.

It came after Huang reported quarterly profits had soared to $12.3 billion on record high revenue driven by demand for its technology to power artificial intelligence.

“Nvidia shows that AI is here to stay,” said Adam Sarhan of 50 Park Investments. “It’s a tipping point where AI is going to go mainstream and get mass adoption and it’s going to be very bullish.”

Huang owns about 3.5 per cent of the company he co-founded in 1993 and saw his personal fortune soar to almost $70 billion.

His rise to spot 21 on Forbes’ list of the world’s richest people has been meteoric – his net worth was just $4 billion in 2019.

Nvidia CEO Jensen Huang had a good day at the office. Picture: AFP PHOTO / Mandel Ngan

Nvidia is now the third most valuable company in America behind only Apple ($3 trillion) and Microsoft ($2.8 trillion) after its valuation exploded by about 500 per cent over the past 18 months.

Nvidia controls about 80 per cent of the high-end chip market, which has seen soaring demand from companies rushing to upgrade their AI offerings.

“The people who made the most money in the gold rush of the mid-1800s were the ones providing the tools to get the job done, not those hunting for the precious metal,” said Russ Mould, investment director at AJ Bell.

“Nvidia is effectively playing the same role today in this tech revolution.”

Prior to Nvidia’s results, stocks had been under pressure in recent days as investors shifted their expectations on monetary policy, now eyeing later Federal Reserve interest rate cuts.

But those concerns were outweighed Thursday by the buzz over AI. Other companies tied to AI had big gains, including Advanced Micro Devices, up 10.7 per cent, and Super Micro Computer, up 32.9 per cent.

– with AFP

Originally published as Nvidia adds more than $250 billion in value in one day to smash record