Jensen Huang, co-founder and chief executive officer of Nvidia Corp., during the opening ceremony of a Siliconware Precision Industries Co. plant in Taichung, Taiwan, Jan. 16, 2025.
An Rong Xu | Bloomberg | Getty Images
Nvidia is out, leaving Apple as the sole member of the $3 trillion club.
The chipmaker’s shares rose 1% Friday after a losing session Thursday. Shares shed 8.5% following Nvidia’s quarterly earnings, wiping out about $273 billion in value and bringing the company’s market cap of $2.94 trillion.
Despite this week’s 12% slump, Nvidia is still the second most valuable U.S. tech company, behind Apple and ahead of Microsoft, one of its biggest customers.
So far in 2025, Nvidia shares have lost more than 12% of their value, as the company faces investor concerns about export controls, tariffs, more efficient artificial intelligence models, and an overall slowing pace of growth.
Playground Global’s Sasha Ostojic told CNBC’s “Squawk Box” on Friday that the fundamentals of Nvidia still appear strong despite the recent price action and that the company’s “executing as well as it could.” While the recent moves may stem from profit-taking, he believes there’s more upside for shares.
“Any dips and spikes — especially short-term — are based on sentiment and perception, not necessarily on fundamentals, said Ostojic, who owns the stock.
Even after the latest slide, Nvidia is still worth five times more than it was two years ago, at the start of the generative AI boom. It first hit a $3 trillion market cap in June 2024.
Nvidia reported results Wednesday that topped analysts’ estimates across the board, with revenue jumping 78% from a year earlier to $39.33 billion. The company’s data center revenue, which includes its market-leading graphics processors for AI workloads, soared 93% on an annual basis to nearly $36 billion.
Nvidia signaled that it will have a strong quarter to kick off its fiscal 2026 and that production issues for its next-generation chip, Blackwell, had been mostly resolved.
In recent weeks, Nvidia CEO Jensen Huang has said that the demand for its chips will remain strong as next-generation AI models that think “about how best to answer” questions step by step will require much more computing power.
“The amount of computation necessary to do that reasoning process is 100 times more than what we used to do,” Huang told CNBC’s Jon Fortt in an interview Wednesday.
Nvidia counts on billions of dollars of infrastructure spend annually from the largest tech companies in the world for an outsized amount of its revenue. On Wednesday, Huang said that large cloud service providers — companies such as Microsoft, Google and Amazon — accounted for about half of Nvidia’s data center revenue.
Other semiconductor stocks have also felt the pressure this week, with shares of Advanced Micro Devices down more than 10%. The chipmaker has tanked more than 13% since the start of February after its fourth-quarter data center revenues fell short of expectations, spurring doubts over its ability to compete with Nvidia.
