Nvidia’s Market Cap Is Now Bigger Than Berkshire Hathaway’s. What’s Behind the Surge.

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Nvidia

now has a higher market capitalization than Warren Buffett’s Berkshire Hathaway, as investors buy up shares of the chip maker, betting that its role in artificial intelligence will fuel growth.

Nvidia

shares (ticker: NVDA) have surged 101% in 2023, to a recent $295. The chip company currently has a market cap of $722 billion as of Tuesday and is the fifth-largest U.S. company. That beats out

Berkshire Hathaway

(BRK.A, BRK.B), which has a market cap of $709 billion.

Shares of

Nvidia

were 1.9% higher on Tuesday.

Investors are excited about Nvidia’s future in AI. Nvidia’s chips have exposure to generative AI, which can create text, images, or other forms of media in response to prompts from the user, and benefit from the popularity of ChatGPT.

“We feel that [Nvidia’s] business will continue its acceleration as the year rolls on due to the existing tailwinds relating to AI and data-center expansion,” Piper Sandler analyst Harsh Kumar wrote in a research note last month.

Nvidia’s market cap could go even higher following the company’s earnings report, which is expected to be released after the markets close on May 24.

“Because of the buzz over AI, the cloud computing centers are gearing up and Nvidia’s chips are increasingly being used. So, it will be very interesting to see what Nvidia’s guidance will be,” Navellier & Associates founder Louis Navellier wrote last week.

Write to Angela Palumbo at [email protected]