On Thursday, the shares of Nvidia increased by 12 per cent, taking the chipmaker closer to the US $1 trillion valuation mark on hopes that it will get a boost from companies that are plowing billions of dollars into their metaverses, the latest technology buzzword.
The company's stock has been on a tear after Meta Platforms, formerly Facebook, announced plans late in October to rebrand itself in a bid to build a metaverse around its widely used platforms.
Nvidia forecast upbeat fourth quarter results, betting on growth in its business that supplies chips to power artificial intelligence and the metaverse.
Its shares have doubled this year and breached the US $800 billion valuation mark on Thursday, far exceeding those of rivals Intel and Advanced Micro Devices, which have risen 0.82 per cent and 65 per cent, respectively.
Some analysts remain cautious over the high valuation, as Nvidia cements its position as the seventh most valuable US company.
Bernstein analyst Stacy Rasgon said that the shares admittedly trading at eye-watering levels will be the other potentially sticky factor.
RoundHill Ball MetaverseETF, which tracks companies that benefit from metaverse, rose by 1.7 per cent to hit a new record high.
The ETF has increased more than 20 per cent since hitting a low on October 4, with Nvidia's largest holding.
The company released Omniverse Enterprise, a set of software tools that will help companies create a metaverse of three-dimensional virtual worlds, the computing power for which would come from Nvidia's chips.
Its executives have been drumming up the concept and used the term omniverse 36 times on Wednesday's post-earnings call, a big jump from the 20 and seven references in the August and May calls.
Wells Fargo analysts said that Nvidia's comments reinforced our positive thesis on the company's positioning strategy to become an enabling platform story for the metaverse.