Nvidia on Tuesday became the first chipmaking company to enter the elite $1 trillion club. The past three trading sessions on Wall Street have seen Nvidia stock rise more than 31 per cent including a three per cent gain on Tuesday – though its market cap soon fell below that $1 trillion mark. Apple, Alphabet, Microsoft and Amazon are all members of the $1 trillion club, while Meta is a former member. But why is the share price of Nvidia, a company famed for making graphics processing units (GPUs) favoured by hardcore gamers, zooming? Experts say Nvidia is benefitting from the hype and craze surrounding Artificial Intelligence. The stock’s value has tripled in less than eight months, reflecting the surge in interest in artificial intelligence following rapid advances in generative AI, which can engage in human-like conversation and craft everything from jokes to poetry. According to CNBC, the company’s powerful chips are a favourite of researchers who use them to train and run advanced AI programmes. “Training these programmes involves processing large amounts of data and performing complex mathematical computations. Nvidia’s GPUs excel in these tasks by efficiently handling parallel computations, which accelerates the training process,” the piece noted.

Full explainer : The Power of AI: Why Nvidia became the first chipmaking company to enter $1 trillion club.