Nvidia is already bigger than the entire German stock market

 

"Nvidia's capitalization is already larger than the entire German stock market. There is a forecast that it will reach USD 10 trillion by 2030.

Nvidia's capitalization exceeded USD 2.8 trillion. Therefore, it became greater than, for example, the value of the entire German stock market (USD 2.5 trillion) or than the total capitalization of Meta Platforms, Tesla, Netflix, AMD, Intel and IBM. From the beginning of the year to the opening of Wednesday's session, it increased by 137%, and during the first three sessions after the publication of its last quarterly report (i.e. from May 22) it increased by over 20%.

Why are Nvidia shares rising?

Investors certainly liked the fact that Nvidia had very good results for the quarter ended April 28. Its net profit then amounted to USD 14.88 billion, while in a similar period a year earlier it was USD 2.04 billion. The company generated USD 26.04 billion in revenue, compared to the expected USD 24.65 billion. It also announced that revenue will reach USD 28 billion in the current quarter.

The impetus for the increase in its shares was also the fact that billionaire Elon Musk managed to collect USD 6 billion from investors for his start-up xAI, which is to conduct research on artificial intelligence. Musk announced that he intends to use Nvidia's cutting-edge graphics processors to create a supercomputer.

German consumer sentiment continues to rise for the fourth month in a row. The German GfK Consumer Climate Indicator increased to -20.9. The low willingness of households to make purchases is worrying.

On Wednesday, of all companies listed on world stock exchanges, only Apple ($2.9 trillion) and Microsoft ($3.2 trillion) had a larger capitalization than Nvidia. According to analysts, the chances that Nvidia will overtake Apple this year in terms of capitalization are high. Especially since Apple is currently doing worse than other American technology giants in creating solutions based on artificial intelligence technology.

- Business is going extremely well for Nvidia. There are also many opportunities for further development, and the topic of artificial intelligence may still be relevant, says Dan Coatsworth, an analyst at AJ Bell.

How much more can Nvidia shares gain?

Beth Kindig, an analyst at I/O Fund, presented a forecast that Nvidia's capitalization will reach USD 10 trillion by 2030. Sales of Blackwell processors are expected to contribute particularly strongly to Nvidia's revenue growth. "They will allow the creation of large trillion-plus language models, and this is exactly what large technology companies want to achieve," Kindig wrote. It also expects the global data center market to grow to $400 billion by 2027, to $1 trillion by 2030, and that a huge portion of it will be powered by Nvidia-designed chips.

Of the 81 recommendations for Nvidia shares collected by Bloomberg, there are none recommending selling these securities. Six say to hold Nvidia shares and two are neutral. The rest indicates that these securities should be bought or overweight. The high price target on these recommendations is $1,443.93, while they closed at just over $1,140 on Tuesday. (Their price broke the USD 1,000 level for the first time on May 23).

Nvidia is to implement a 10:1 split of its shares on June 10. It aims to make them more affordable for retail investors and its employees. In this respect, it followed in the footsteps of Amazon, Alphabet and Tesla, which carried out stock splits in 2022."