Apr 24, 2023 - Economy

Nvidia is the best-performing stock in the S&P this year, thanks to AI hype

Data: FactSet; Chart: Axios Visuals

Chipmaker Nvidia is the highest-flying stock in the S&P 500 in 2023.

Why it matters: Soaring semiconductor share prices reflect the flurry of excitement — and hype — surrounding artificial intelligence (AI) technology.

By the numbers: Santa Clara, Calif.-based Nvidia has seen its stock price surge roughly 85% this year, making it the single best performing stock in the S&P index.

What they're saying: In a March research note raising their price target on the shares, Bank of America analysts cited Nvidia's "dominance in the nascent generative AI/large language model (LLM) market that could reshape the existing tech industry and usher in disruptive startups."

  • Be smart: The good folks at the New York Times maintain a helpful glossary on A.I. helping to translate what the heck these analysts are talking about.

💭 Our thought bubble: Seasoned market hacks like us have seen various tech hype cycles come and go. (Anyone remember crypto? That was fun...)

  • The surge of Nvidia's share price suggests that, as our colleague Felix Salmon recently noted, one of the only certainties in AI right now is that "there's real money in selling picks and shovels to the folks getting into AI."
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