As the Artificial Intelligence (AI) boom continues to fuel gains across the crypto industry and Traditional Finance (TradFi) sectors, Nvidia hit a major milestone on Tuesday. The US-based chipmaker joined one of the most exclusive clubs on Wall Street when its market cap hit the $1 trillion mark. Meanwhile, AI tokens rode on the ensuing bullishness, recording massive gains over the last 24 hours.
Nvidia joins the $1 trillion club
Nvidia surprised market players last week when it reported skyrocketing earnings and an exceptionally strong revenue forecast for the next fiscal year. Powered, to a great extent, by the hype around AI, the report pushed the company’s share price higher, landing it a spot amongst the five largest publicly traded companies in the world on Tuesday.
The chipmaker’s share price rallied as much as 4.5% during the trading hours to reach a high of $419 on May 30, pushing its market capitalization slightly above the $1 trillion mark.
This makes Nvidia the ninth company in the world to ever achieve such a milestone, and currently, only five other companies have that distinction worldwide. These include Apple, Microsoft, Alphabet, Amazon and Saudi Aramco.
However, the rally was short lived, as the stock came down to the current price at $401.
NVDA/USD Daily Chart
Nvidia manufactures chips that power generative AI, an artificial intelligence tool used to create content in form of text and images, in response to user prompts. This is the kind of technology underlying AI tools such as OpenAI’s CharGPT, Google’s BARD, and Dall-E.
During the first quarter of 2023, the company announced a 26% increase in profits to $2 billion with sales rising 19% to $7.2 billion. Both figures surpassed expectations of Wall Street analysts. Nvidia’s outlook for the current quarter was also significantly — about 50% — higher than what analysts had predicted.
Its share price is up about 180% year-to-date. To retain the $1 trillion market valuation, Nvidia stock has to remain above $404.86.
Note that Nvidia’s achievements on May 30 affected AI tokens, which rallied following the news of the company’s $1 trillion market cap.
AI tokens ride on the Nvidia hype
The market cap of AI cryptos has increased by 3.5% over the last 24 hours, adding approximately $17 billion to their overall valuation. AI tokens, including Fetch,ai (FET), Render token (RNDR), SingularityNET (AGIX), The Graph (GRT), Artificial Liquid Intelligence (ALI) among others posted notable gains on Tuesday.
At the time of writing, Akash Network (AKT) stands out among the top-cap AI tokens, rising 14.3% over the last 24 hours and more than 84% over the last week to trade at $0.673715, according to data from Coingecko.
Top 10 AI Cryptos
The fact that these tokens still depend on external factors and the hype in the AI sector to trigger their price actions is a bit concerning. This means if the AI buble bursts and the hype goes away, the AI coins may not survive.
Therefore, AI tokens remain susceptible to massive declines, unless the projects have fundamentals that push the prices from within the crypto industry.
