How AI is catapulting Nvidia toward the prized $1 tn club

The business that started 30 years ago with a meeting at a Denny's has become the semiconductor company at the heart of the artificial-intelligence revolution, putting it on the cusp of becoming the first $1 trillion chip company.

- Asa Fitch

Nvidia's shares soared more than 24% on Thursday to an all-time high after it said the AI boom is translating into record sales, fueling excitement that the new era in computing is kicking in faster than previously thought.

"When generative AI came along, it triggered a killer app for this computing platform that's been in preparation for some time," Nvidia Chief Executive Officer Jensen Huang said Wednesday.

Michael Sansoterra, the chief investment officer at Atlanta's Silvant Capital Management, which counts Nvidia among its largest stockholdings, said, "This is going to be the largest change in tech that we've seen since the internet, there's little doubt in my mind." What is so exciting for investors now, he added, is that after months of chatter around AI, the money is starting to flow.

The stock is up nearly 160% this year alone. The $183.8 billion it added Thursday in market valuation, the third-most ever for a U.S. company, pushes its total to over $938 billion, bringing Nvidia close to joining Apple, Microsoft, Amazon and Google parent Alphabet on the list of the world's trillion-dollar companies.

Unlike those companies, Nvidia isn't a household name. It doesn't produce consumer devices or internet services that the world's masses use daily. Behind the scenes, though, its chips have become indispensable. They are used in PCs, cars and robots. Now with AI, its processors drive new chatbots that generate cogent-sounding sentences and a raft of other tools that the world's biggest companies are racing to deploy.