Nvidia hits $1 trillion market cap

Nvidia briefly hit a $1 trillion market cap at the open Tuesday, joining a small club of mostly technology companies. Nvidia's shares have to hold above $404.86 to maintain that distinction throughout the day.

The chipmaker's stock rocketed last week after it posted quarterly earnings with top- and bottom-line numbers that significantly beat consensus estimates. Nvidia's gain buoyed other chipmakers, with the notable exception of Intel, and was also fueled in part by estimates that were more optimistic than expected.

Significantly, Nvidia forecast $11 billion in sales for the fiscal second quarter of 2024 alone. Expected sales were 50% higher than consensus estimates of $7.15 billion.

It's been a banner year for chipmakers, parts of the tech industry and the Nasdaq, driven in part by the AI frenzy and the possibility of slowing Federal Reserve rate hikes. Alongside Nvidia, Alphabet, Meta and Microsoft were also buoyed in last week's trading.

Nvidia's graphics processing units, or GPUs, are critical to generative AI platforms like OpenAI's ChatGPT and Google's Bard. The company has historically been a leader in the so-called "discrete" or standalone GPU field, but until recently, many consumers thought of GPUs as primarily used for intensive gaming.

The advent of crypto mining and AI has upended that belief, and GPU manufacturers and suppliers, including Nvidia, AMD and TSMC, have seen share prices rise significantly over the last few months.

By contrast, Intel, which struggled with inventory issues and development challenges, has been historically focused on the chip market for central processing units, or CPUs. The company hasn't shared, comparatively, in the wave of investor interest.

Nvidia's expected market cap would place it alongside a handful of other companies, including Apple, Alphabet, Amazon, and Microsoft, that have a $1 trillion market cap. Nvidia shares were already up 166.5% year-to-date prior to Tuesday's open.

— CNBC's Kif Leswing, John Melloy and Gina Francolla contributed to this report.