On Tuesday, a new member (Nvidia) joined the exclusive group of US firms valued at more than $1 trillion—at least for a short time.

On Tuesday, a new member joined the exclusive group of US firms valued at more than $1 trillion—at least for a short time.

Nvidia, a chip manufacturer, momentarily joined the group when its share price rose by more than 5% before falling.

Last week, after the company predicted "surging demand" as a result of developments in artificial intelligence (AI), shares had already increased by more than 25%.

The other publicly traded US companies valued at more than $1 trillion (£800 billion) are Apple, Amazon, Alphabet and Microsoft.

Nvidia was first recognised for producing the kind of computer chips that handle visuals, particularly for video games, when it was founded in 1993.

Long before the AI shift, the company's charming co-founder Jensen Huang gambled by investing in new Nvidia chip capability; the long game seems to have paid off.

According to one review, it has a monopoly on 95% of the machine learning business, and its hardware currently powers the majority of AI applications.

The chatbot ChatGPT, whose release last year ignited the AI craze, was developed using 10,000 Nvidia graphics processing units (GPUs) bundled up on a Microsoft supercomputer.

Nvidia's stock price has more than doubled over the last year as investors think that the firm will reap the rewards when AI leads in the next wave of technological advancements.

The California-based company's shares concluded Tuesday's New York trading at roughly $401, or up about 3%, leaving it with a market value of more than $990 billion.

Nvidia experienced a spike during the pandemic, but its total sales growth remained unchanged while its profits declined by half last year.

There are concerns about Nvidia's ability to meet demand, particularly as start-ups and competitors AMD and Intel scramble to create their own products.

In today’s prices, Nvidia has a market worth more than eight times greater than Intel's. Regardless of the fact that Nvidia reported $27 billion in revenue while Intel reported more than $63 billion.

Investor and well-known tech supporter Cathie Wood, CEO of Ark Invest, sold her interest in Nvidia in January, missing the gains picked up thereafter.

She recently stated on Twitter that the company's shares were "priced ahead of the curve". Markets, according to her, were mistaken to believe that the company was "the only AI play".

Investors in the past have quickly turned against their previous favourites.

For example, a few months after joining the $1 trillion club in 2021, Meta, which is owned by Facebook, was kicked out when its shares lost about three-quarters of their value. Currently, it is worth roughly $670 billion.

(Sources: bbcnews.co.uk)