Nvidia Stock Rose 16% to Record High, Adding $277 Billion in One Day

Nvidia (NVDA) shares rose 16.4% to close at a record high of $785.38 on Thursday, adding $277 billion to its market capitalization, the largest one-day gain in Wall Street history. The impressive growth was fueled by the company's strong earnings report, which beat analysts' expectations and confirmed its dominance in the booming artificial intelligence chip market.

Here's What Happened

Nvidia reported a sharp 233% year-over-year revenue growth, significantly beating analysts' estimates of 208%. This steep growth was primarily driven by rising demand for artificial intelligence chips used in data centers and gaming PCs.
The company's strong performance kicked off a rally in the broader artificial intelligence sector, with other chipmakers such as AMD and Broadcom also making significant gains. The Philadelphia SOX Semiconductor Index, which is heavily weighted toward artificial intelligence companies, hit a record high.
Nvidia has strengthened its position as a leading player in the high-end artificial intelligence chip market, controlling about 80% of the segment. The dominance, coupled with bullish forecasts, has pushed the company's market capitalization to $1.96 trillion, making it the third most valuable company in the US, surpassing Amazon and Alphabet.
While bullish analysts raised their price targets, some expressed concerns about the sustainability of Nvidia's rapid growth, particularly in the face of potential headwinds like US chip export restrictions to China.
A sudden rise in the stock price triggered a domino effect, as short sellers were forced to scramble and buy back shares to cover their positions.