Surging Nvidia stock keeps drawing in more believers
Mint Mumbai|February 26, 2024
This reflects FOMO among investors who have sat on the sidelines while the firm's valuation has eclipsed $2 tn
Gunjan Banerji
Surging Nvidia stock keeps drawing in more believers

Nvidia's historic run is minting profits for investors big and small. Many are betting the boom is just beginning.

They are piling into trades that the chipmaker's shares, which have more than tripled over the past year, are headed still higher. Some have turned to the options market to look for ways to turbocharge their bets on artificial intelligence (AI) after a blockbuster earnings report sent the stock up 17% over the past two days.

The exuberance reflects hope that the company is the vanguard of wide adoption of artificial intelligence and an intense fear of missing out (FOMO) among investors who have sat on the sidelines while the company's valuation has eclipsed $2 trillion.

With the help of Nvidia, stocks have stormed into 2024. The S&P 500, which has chalked up fresh records in recent weeks, is up 6.7%. That is the index's second-best performance for this time period over the past 10 years. The gains were only surpassed by an 11% increase in 2019.

Nvidia has contributed to about a quarter of those gains, according to S&P Dow Jones Indices.

The Nasdaq, too, is up 6.6% this year and neared a record Friday. The tech-heavy index has been boosted by Nvidia, which this week tacked on $277 billion in additional market value, along with six other tech titans collectively known as the Magnificent Seven.

The Dow Jones Industrial Average is up 3.8% this year and has hit repeated records in recent weeks.

"You look at these numbers and what this company's done-it's almost without precedent," said Mike Ogborne, founder of San Francisco-based hedge fund Ogborne Capital Management, who counts Nvidia among his top five biggest holdings. "It is nothing short of amazing."

Ogborne compared AI with the launch of the internet more than two decades ago, which kick-started a technology craze that lasted years.

"It's exciting," Ogborne said. "It's great for America."

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