Shares of Nvidia rose 2.5% to $404.76 on Wednesday, lifting its market cap to $248.93 billion. Chip giant Intel fell 0.35% to $58.10, placing its market cap at $246 billion as of mid-day. Nvidia replaces Intel as the third-largest chipmaker in the world by market cap, behind Taiwan Semi (TSM) - Get Report and Samsung.
Wall Street analysts are bullish on several aspects of Nvidia's business.
Writing in a recent note, Susquehanna analyst Christopher Rolland raised his price target for Nvidia shares to $450 from $420, telling clients in a note that he sees Mellanox, which Nvidia acquired earlier this year, growing at a double-digit rate over the next three to five years. He estimated that Mellanox could add $30 billion to Nvidia's market cap.
In its first quarter earnings release, Nvidia reported a combination of tailwinds that drove a sizable earnings and revenue beat, despite the coronavirus pandemic.
Nvidia's data center segment rose 80% year-over-year and topped $1 billion in sales for the first time in the first quarter.
The company's extensive footprint in gaming was also a boon in that period, which was the first that overlapped with the COVID-19 pandemic.
Nvidia reported a 50% rise in gaming hours played on its GeForce platform and strong e-tail sales of gaming laptops and hardware, offsetting the impact of store closures. Nvidia CEO Jensen Huang also hailed Nvidia's RTX lineup of graphics cards, designed to enhance ray tracing technology, as a "home run" that will inevitably become the mainstream standard.
For the quarter ending in July, analysts are expecting Nvidia to report $3.65 billion in revenue and earnings per share of $1.97 cents on average.
Shares of Nvidia have gained 69% year to date.