The AI boom bolsters bullish sentiment in artificial intelligence shares. C3.ai stock soared over 33% on Tuesday as Nvidia briefly joined the trillion-dollar-market-cap club on Tuesday morning. Meanwhile, year-to-date return of C3.ai reached over 292%.
It’s safe to say that Nvidia really crushed it with its latest earnings release. That’s the immediate takeaway, following the nearly 25% post-earnings spike in the price of NVDA stock.
The chip maker knocked it out of the park with both results and guidance because of its high AI exposure. This may seem to many as if the market has overreacted to news that was arguably already baked into NVDA’s share price.
Over the weekend, Nvidia CEO Jensen Huang gave the keynote address at the Taipei International Information Technology Show -- also known as Computex. At the event, Huang introduced Nvidia's new DGX GH200 AI Supercomputer. The device features Nvidia's new Grace Hopper Superchips, NVLink interconnect technology, and NVLink Switch System, which combines 256 GH200 superchips, allowing them to perform like a single GPU.
The supercomputer reportedly has 500 times more memory and is 2.2 times faster than its predecessor for training generative AI models.
While NVDA stock has commanded much of the spotlight lately, other AI stocks are also joining in on the fun. On Tuesday, shares of C3.ai are up more than 33%. Meanwhile, Palantir is up nearly 8%. Enthusiasm over the broader deployment of AI seems to be enlivening this tech subsegment.
Earlier this month, Palantir CEO Alex Karp stoked excitement when he admitted, "The depth of engagement with and demand for our new Artificial Intelligence Platform (AIP) is without precedent." He also said that Palantir expects to be profitable each and every quarter this year.
According to Grand View Research, the global AI market reached a $136.55 billion valuation in 2022. Experts project that, from 2023 to 2030, the sector will expand at a compound annual growth rate (CAGR) of 37.3%. By 2030, the AI ecosystem may command a value of $1.81 trillion. Obviously, that’s brilliant news for AI stocks.
Software and cloud giant Microsoft kicked off the latest AI surge when its investee OpenAI released ChatGPT last November. The advent of ChatGPT awakened the tech world, and really every business, to the transformative potential of artificial intelligence. Shares of Microsoft have gained over 38% as of May 31st this year.
Following the earth-shaking debut of ChatGPT, Microsoft followed up its seed investment in OpenAI with another $10 billion in January, bring its total investment to $13 billion, or just under 50% of OpenAI's $29 billion valuation at the time.
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