SHARE OF THE WEEK: Nvidia sees shares almost triple in value this year

The US chip designer which tried to buy British rival Arm, and is popular among some of the UK’s leading stock pickers, has seen its shares almost triple in value so far this year.

This has made Nvidia the best-performing stock in the S&P 500. So there will be much interest when it publishes its second-quarter results on Wednesday – particularly among investors who own the stock through funds such as Bailie Gifford American and Scottish Mortgage Investment Trust.

One of the so-called Magnificent Seven alongside fellow American corporate giants Alphabet, Amazon, Apple, Meta, Microsoft and Tesla, Nvidia has helped drive a substantial portion of stock market gains in the US this year.

As such, expectations are high, with revenues expected to come in at around £8.6billion, well above sales of £5.3billion in the same period last year. Boss Jensen Huang will be eager not to disappoint.

‘The frothier valuation does increase the chance of disproportionate reactions should there be any disappointment from next week’s results,’ warns Sophie Lund-Yates at Hargreaves Lansdown.

Analysts are expecting third-quarter sales of £9.3billion, up from £4.6billion a year earlier.

For much of the past 30 years, Nvidia’s success has come from computer games, with its chips featuring in the likes of Call Of Duty. But its chips are also a favourite for Artificial Intelligence, or AI, and when OpenAI released ChatGPT last year it contained more than 20,000 graphics processors made by Nvidia.