Nvidia stock (NVDA) slipped in early trading Thursday, pushing the company’s valuation below the $3 trillion mark a day after the company accomplished the feat. Nvidia’s stock price opened at $1,240.09 per share before falling $1,184 shortly after trading began.
The chip giant’s shares closed at $1,240.91 on Wednesday, overtaking Apple and becoming the second most valuable company on the U.S. stock exchange before Thursday’s early decline. Microsoft currently holds the top spot.
Wednesday’s rally came amid a broader rise in technology stocks, with weaker U.S. economic data and a decline in U.S. Treasury yields boosting markets on hopes of a possible Federal Reserve rate cut as early as July.
Nvidia is the prime example of investor enthusiasm for AI, which has only intensified with OpenAI’s release of ChatGPT in late 2022.
The stock is up over 140% this year and 200% last year; Nvidia shares have gained more than 3,300% over the past five years. During the same periods, the Nasdaq has gained a more modest 14%, 29%, and 126%, respectively.
Nvidia shares were steady in premarket trading Thursday, rising less than 1%.
Nvidia’s surge this week follows an announcement from CEO Jensen Huang on Sunday. He told an industry conference that the company will launch a more powerful version of its Blackwell chip – the Blackwell Ultra – in 2025, followed by a new AI chip platform called Rubin in 2026. The company will unveil an Ultra version of Rubin in 2027.
Nvidia is the technology industry’s preferred supplier of AI chips and integrated software.
Tech giants like Amazon (AMZN), Google (GOOG), Meta (META), Microsoft, Tesla (TSLA) and others use the company’s hardware for everything from their cloud-based AI offerings for customers to their own AI models and services.
In the first quarter, Nvidia reported adjusted earnings per share of $6.12 on revenue of $26 billion, up 461% and 262%, respectively, from the same period last year.
Nvidia’s data center revenue rose 427% year over year to $22.6 billion last quarter, accounting for 86% of the company’s total revenue for the quarter. Nvidia’s gaming segment, which had previously been its most important business, generated revenue of $2.6 billion.
Nvidia also announced that its shares would split 1-for-10 on June 7 and that the company would increase its dividend from $0.04 to $0.10 per share.
But Nvidia is not the only provider on the market.
AMD (AMD) and Intel (INTC) are pushing ahead with the development of their own AI chips to outdo Nvidia. AMD recently announced that its MI325X and MI350 chips will launch in 2024 and 2025, respectively, and said its next-generation AI accelerator platform MI400 will arrive in 2026.
Intel, meanwhile, said its Gaudi 2 and Gaudi 3 AI accelerators will undercut rival chips on price. And with companies spending billions on AI chips, any price savings are certainly welcome.
In addition, Nvidia is facing growing competition from its own customers: Amazon, Google and Microsoft want to break free from their dependence on the company’s chips while saving on investments.
However, for now, Nvidia maintains its dominance in the AI space and will continue to do so for the foreseeable future.
Email Daniel Howley at [email protected]. Follow him on Twitter at @DanielHowley.
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