This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
Shares of Nvidia (NASDAQ: NVDA) surged higher (again) on Wednesday, jumping as much as 5.2%. At the end of the day, the stock was still up 5.2%, putting its market cap above $3 trillion for the first time.
Several developments in the field of artificial intelligence (AI) helped fuel the stock's relentless rise.
The poster child for AI
As the leading provider of graphics processing units (GPUs) used in artificial intelligence (AI), it seems any bit of positive news in the space can be a catalyst for Nvidia stock. The phenomenon was in full view today.
News broke that Taiwan Semiconductor Manufacturing, also called TSMC, is purchasing a high-NA extreme ultraviolet machine from ASML. This marks the latest in AI chipmaking technology, and Nvidia is TSMC's second-largest customer, giving it full access to this top-of-the-line tech.
In an unrelated development, Hewlett Packard Enterprise reported the results of its fiscal second quarter (ended April 30), and the results blew past even the most bullish expectations. While the company generated modest year-over-year gains, it cited growing demand for AI as the catalyst for its better-than-expected results.
What's good for the goose...
What do these developments have to do with Nvidia? Nothing, at least not directly. However, it does illustrate that the demand for AI continues to accelerate, bolstering the theory that it's still very early days for AI. Consequently, what's good for AI seems to be good for Nvidia.
The company has been among the biggest beneficiaries of AI adoption, as Nvidia's processors are the gold standard for AI use cases. While estimates vary, Nvidia is credited with a market share of roughly 90% of the AI chip market.
Finally, excitement has reached a fever pitch ahead of Nvidia's 10-for-1 stock split, which is scheduled to take place after the market close on Friday.
The adoption of generative AI continues to gain steam. While estimates vary wildly, the size of the market is expected to be between $2.6 trillion and $4.4 trillion in the coming years, according to global management consulting firm McKinsey & Company.
The growing body of evidence suggests there's still plenty of room left for Nvidia to run.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
