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Nvidia Stock Rockets as Company Hits $2 Trillion Mark on Nasdaq Index; Partnerships and AI Dominance Propel Shares

February 27, 2024 – In a historic milestone, Nvidia (NASDAQ: NVDA) has soared past the $2 trillion market cap on the Nasdaq Index, becoming the fastest company to achieve this feat in just 176 trading days since closing above $1 trillion on June 13, 2023.

Investor excitement has been fueled by Nvidia’s dominance in the tech sector, driven by exceptional performance and strategic partnerships. The latest surge comes on the back of the company’s announcement of increased production of its HBM3E chips, designed for artificial intelligence capabilities, and the formation of the AI-RAN Alliance with industry giants such as Arm Holdings, Microsoft, Amazon, Softbank, Samsung, Ericsson, and Nokia.

Nvidia’s strategic moves have not only garnered attention in the semiconductor space but have also boosted affiliated stocks. SoundHound AI (NASDAQ: SOUN) witnessed a staggering 39.5% surge as Nvidia expanded its partnerships in the telecommunications industry. The partnership announcements, coupled with SoundHound’s integration of OpenAI’s ChatGPT technology in its Iris voice-assistant, have ignited investor optimism, pushing SoundHound’s stock up 180% in 2024.

The Motley Fool’s Executive Editor, Brian Sozzi, has weighed in on the soaring optimism, cautioning about a potential tech bubble. While Nvidia continues to outperform, experts warn of overvaluation, echoing sentiments expressed by Apollo Global Management, whose chief economist, Torsten Sløk, has raised concerns about current market conditions surpassing the dotcom era’s excesses.

Despite warnings, Nvidia’s CEO, Jensen Huang, remains optimistic, watching revenue soar due to surging demand for the company’s GPUs, especially those powering advanced generative AI like Sora from OpenAI. The demand is so intense that it has prompted concerns about fair chip distribution and even led to the U.S. prohibiting the export of Nvidia’s high-performance chips to China.

Part of the recent surge in Nvidia’s stock can be attributed to its stake in SoundHound AI, whose Iris voice-assistant technology is set to launch with Stellantis DS vehicles. Investors are betting on the potential synergies between Nvidia’s advancements in AI, RAN, and 6G technologies and the capabilities of SoundHound’s voice-based assistant.

As the stock market rallies behind Nvidia, billionaire Marc Rowan’s Apollo Global Management warns of a potential bubble in AI stocks, highlighting concerns about overvaluation. Even ARK Invest founder Cathie Wood, known for her bullish stance on disruptive tech, has reduced exposure to AI semiconductor space, raising questions about the sustainability of the current market momentum.

Nvidia’s journey to $2 trillion is undoubtedly impressive, but the cautionary notes from industry experts suggest a nuanced approach for investors navigating the tech landscape. The spotlight remains on Nvidia as it continues to shape the future of AI technologies, but the industry will be closely watching for signs of a sustainable trajectory amid the current market dynamics.