Nvidia’s stock surge helps markets hit record highs. What is happening?

globalnews.ca:

Nvidia, the chipmaker underpinning a much-hyped artificial intelligence revolution, saw its market capitalization briefly pass US$2 trillion for the first time on Friday amid a record-breaking week for Wall Street.

Nvidia’s stock traded as high as US$823.94 per share on the tech-heavy NASDAQ Friday before closing lower at US$788.17, up marginally from Thursday’s close.

Shares of the Santa Clara, Calif.-based company surged after an earnings report Wednesday that surpassed estimates and set out lofty expectations for demand in the year ahead.

The S&P 500 and Dow Jones Industrial Average clung on to end another session at fresh record highs on Friday. All three Wall Street indices scored weekly gains, as artificial intelligence stocks had enough steam to keep the rally chugging along.

Canada’s main stock index gained 95 points on Friday, notching another 22-month high after adding 150 points on Thursday.

Nvidia added US$277 billion in market value Thursday, setting a new record for a single-day gain on Wall Street. That helped the company vault to US$2 trillion from US$1 trillion market value in around eight months — the fastest among U.S. companies and in less than half the time it took tech giants Apple and Microsoft.

Barry Schwartz, chief investment officer and portfolio manager at Baskin Wealth Management, tells Global News that Nvidia’s rise is “something impossible to comprehend.”

“Nvidia has been one of the most stunning performers the world has ever seen,” he says. “It all has to do with the insatiable demand for AI and what’s coming.”

Schwartz says that the large cap tech companies such as Amazon, Google, Meta and Microsoft have all signalled in their recent earnings calls that they intend to collectively invest