SUPERNEWS

Equities

Nvidia's Stock Continues to Rise, Outperforming Competitors

Nvidia's stock climbs 3.1% premarket, reaching a $2.2 trillion market value, as it outperforms peers and the S&P 500 with an 87% surge this year.

By Bill Bullington

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3/8, 06:45 EST
Apple Inc.
Broadcom Inc.
Meta Platforms, Inc.
Marvell Technology, Inc.
Microsoft Corporation
NVIDIA Corporation

Key Takeaway

  • Nvidia's stock rose 3.1% to $954.95 in premarket trading, extending its year-long quadruple value increase and outperforming the S&P 500 and Nasdaq.
  • Competitors Broadcom and Marvell shares fell, contrasting with Nvidia's growth and highlighting its unique market position.
  • Despite valuation concerns, Nvidia's price-to-projected-profits ratio improved to below 39 times, indicating strong growth prospects.

Nvidia's Remarkable Growth

Nvidia's stock price increased by 3.1% to $954.95 in premarket trading on Friday, marking a continuation of its impressive performance over the past year. On Thursday, shares closed up 4.5% at $926.69, bringing the company's market value to $2.2 trillion. This growth reflects Nvidia's significant rise in value, having quadrupled over the last 12 months. In comparison, Nvidia's shares have surged 87% this year, outpacing the S&P 500's 8.1% increase and the Nasdaq Composite's 8.4% rise.

Market Comparisons

While Nvidia has experienced substantial growth, some of its peers have not fared as well. Broadcom and Marvell Technology saw their shares decline, contrasting with the gains made by Advanced Micro Devices, which was up 0.6%, and Intel, which added 1.7%. This mixed performance among Nvidia's competitors highlights the unique position Nvidia has carved out in the market, particularly in the context of its rapid expansion and the broader tech sector's performance.

Valuation and Growth Prospects

Investors have raised questions about Nvidia's valuation, given its meteoric rise. However, Nvidia's consistent delivery of earnings that surpass Wall Street projections has led to an adjustment in estimates used to value the stock. As a result, its price relative to projected profits has decreased to below 39 times, down from 63 times before its May earnings report. Michael Kirkbride, a portfolio manager at Evercore Wealth Management, commented, "There have been questions about whether Nvidia would grow into its valuation, and now it seems like there’s a decent chance it will. This is not crazy expensive, given the kind of extraordinary growth we’re seeing."