NVIDIA returns to the world's highest market value

Nvidia’s market value holds steady above the $5 trillion mark, firmly retaining its position as the world’s highest-valued company.

Friday, April 24, Nvidia’s stock price closed up 4.32%, at $208.27, setting a new historical closing record previously established on October 29.

So far this year, Nvidia’s cumulative gain has reached 12%, making it the single largest contributor behind the S&P 500 index’s 4.7% increase. Data shows that Nvidia’s contribution to the index’s gain is about 20%.

(Year to date, Nvidia’s stock price has risen by 12%)

Just four weeks ago, Nvidia had pulled back by as much as 20% from its peak. This rally, however, marks a complete exit from nearly a year of volatility range, and it has also become a landmark event in the latest wave of AI chip market activity in U.S. stocks.

Investors will face a critical test moment next week, as Microsoft, Amazon, Alphabet, and Meta will each release their quarterly earnings reports in succession. At that time, the latest signals on AI capital expenditure will affect the market’s judgment of Nvidia and the entire chip sector.

Philadelphia Semiconductor Index rises for 18 straight days, setting a new record

Nvidia’s breakthrough occurred against the backdrop of broad strength across the semiconductor sector.

The Philadelphia Semiconductor Index closed up for the 18th consecutive trading day, setting a record for the longest winning streak in history. Technical indicators also show that the degree of “overbought” is the highest ever.

This week, Texas Instruments and Intel each released strong results one after the other, providing additional support for the sector rally.

Wall Street reports that Texas Instruments issued second-quarter revenue and profit guidance, both of which exceeded Wall Street expectations. On Thursday, its stock price surged by about 20%, posting its best single-day performance since the dot-com bubble burst, while on Friday it closed slightly down 1.8%.

After the U.S. stock market close on Thursday, Intel released strong earnings and optimistic outlook guidance. On Friday, its stock price surged as much as 28%, the largest single-day gain since 1987’s “Black Monday,” before ultimately closing up about 21%, with its share price breaking above the prior all-time high set during the dot-com bubble peak.

Market strategists generally attribute this round of rebound to the continued heating up of enthusiasm for AI infrastructure investment. Paul Nolte, a market strategist at Murphy & Sylvest Wealth Management, said:

The scale of funding in AI is astonishing. At present, we have not seen any signs of a slowdown. Against this backdrop, it’s not surprising that Nvidia has become a star in the return of tech stocks to a bullish trend.

However, he also noted that the market still needs more data to verify the trend:

I’m waiting for the earnings results so I can form a clearer judgment on the outlook for capital expenditure, but even so, I believe Nvidia’s outlook still has plenty of reasons to be optimistic.

Earnings reports from Microsoft and other tech giants will be the key variable next week

Besides the rising enthusiasm for AI infrastructure, geopolitical factors are also pushing investors to seek shelter in technology sectors with solid earnings and profit-growth support.

But whether the market’s current optimism is sustainable depends largely on the earnings reports from major tech companies to be released next week.

As the four largest capital expenditure players in the AI infrastructure space, Microsoft, Amazon, Alphabet, and Meta—through their quarterly results and management’s outlook for future investments—will provide important guidance for the chip sector’s mid-term trend.

Analysts believe that if the above companies maintain or raise their AI infrastructure spending plans, it will directly strengthen the market’s expectations for growth in demand for Nvidia. Conversely, any signals of a slowdown could put pressure on current valuations.