Nvidia Market Value Tops $3.6T After Trump's Victory, Replaces Intel In DJIA

Nvidia just felt the positive effects of the victory of Donald Trump in the presidential elections as its shares soared to a record high on Thursday, surpassing a market value of $3.6 trillion. The company will also replace rival Intel Corp in the Dow Jones Industrial Average (DJIA) and Dow Jones Utility Average (DJUA) effective prior to the open of trading on November 8.

The Republican candidate's win ushered an increase in AI chipmaker's shares by 2.2%, thanks to the optimism felt among investors in anticipation of possible tax cuts and easing of regulations under a Trump presidency, Reuters reported.

On Tuesday, Nvidia beat Apple and rose once more as the world's most valuable publicly traded company. Its shares rose by 2.9%, pushing its market cap to $3.42 trillion, beating Apple's market cap of $3.38 trillion. Meanwhile, Apple's shares have risen 17% this year, Bloomberg reported.

"Over the past several quarters, it has felt like people basically care about inflation numbers, job numbers, and Nvidia numbers," Fall Ainina, director of research at James Investment Research, told Bloomberg News. She further noted that with Nvidia overtaking Apple in market cap, it conveys that it is the biggest beneficiary of the AI infrastructure cycle.

On Thursday, the share market value of the tech giant ended at $3.65 trillion versus Apple's market value of $3.44 trillion.

Shares of Nvidia have been the biggest gainer so far when compared to rival tech giants like Google and Microsoft who are investing heavily in AI computing race. In November, Nvidia's shares rose by 12%

Nvidia's expansion shows no signs of slowing, as this year the company's shares tripled, driven by investors' continued confidence in the company's ability to maintain its growth in shareholder value, NBC reported. The combined driving force behind this success is Nvidia's dominant position in the graphics processing unit (GPU) market and its growing footprint in the artificial intelligence sector.

Nvidia's phenomenal growth as a supplier of GPUs is attributed to its collaboration with OpenAI to supply advanced AI software for ChatGPT. Notably, Nvidia recorded an unprecedented stock surge of over 2700% in five years since 2019.

Effective Nov.8, Nvidia will replace struggling rival Intel in the Dow Jones Industrial Average index thanks to its soaring stock price.

"The index changes were initiated to ensure a more representative exposure to the semiconductors industry and the materials sector respectively. The DJIA is a price weighted index, and thus persistently lower priced stocks have a minimal impact on the index," S&P Dow Jones Indices said in a statement.

Analysts, on average, estimate Nvidia's sales to climb 126% in the current fiscal year to $125.66 billion. Wall Street analysts have repeatedly raised their projections of Nvidia's revenues and profits over the past quarter. The company's EPS too has topped Wall Street expectations in the past four quarters.

Shares of Nvidia closed Thursday's trading at $148.88 on Nasdaq. They opened the session at $146.39 and touched a 52-week high of $148.93. In the pre-market hours on Friday, it gained 0.42% to $149.51.