Shares in US chipmaker Nvidia hit an all-time high last night as it cashed in on the artificial intelligence (AI) boom taking Wall Street by storm.

The stock surged after it revealed a blockbuster second quarter – smashing expectations and showing that the AI craze was here to stay.

Nvidia has been one of the winners of the explosion of AI, with its chips playing a vital role in ChatGPT, which has shifted the tech from fringe topic to a household name.

In a bumper set of results on Wednesday night, Nvidia said revenues more than doubled to £10.6billion in the three months to the end of June, and would climb to £13billion in the current quarter, a rise of around 170 per cent compared to the same time last year.

The business also posted an 843 per cent jump in its quarterly profits to £4.9billion.

The figures sent the shares soaring more than 6 per cent in New York yesterday to over $500 apiece for the first time.

Although the gains eased throughout the day’s trading, the shares have more than tripled this year alone, adding £700billion to Nvidia’s value.

That is around the same as the six biggest companies on the FTSE 100 are worth combined – from AstraZeneca and HSBC to Shell and BP as well as Diageo and Unilever.

The meteoric growth has handed a windfall to Nvidia’s founder and chief executive Jensen Huang, whose own wealth has ballooned by as much as £25billion so far this year. He owns a 3.5 per cent stake, worth £33billion.

Founded in 1993, the story of the world’s most valuable chip maker started at a Silicon Valley diner, with Huang and two other engineers, Chris Malachowsky and Curtis Priem. Uncertain exactly what their business would look like, their initial strategy was to place early bets on markets that barely existed at the time, starting out with PC gaming and graphics processing.

This proved a major success, with their graphics processing unit now essential in the world of gaming in popular titles such as Call of Duty.

It also enjoyed some hype during the launch of the ‘metaverse’, the virtual reality pushed by Facebook founder Mark Zuckerberg when he rebranded the company as Meta in 2021.

But its most recent bet in the world of AI has proved its most lucrative, making it the first semiconductor company to rack up a $1trillion market valuation in May.

It now means Nvidia, whose market cap is around $1.2trillion (£950m), is now a firm member of the ‘Magnificent Seven’ alongside fellow American corporate giants Alphabet, Amazon, Apple, Meta, Microsoft and Tesla.

And analysts are confident that its spot in this elite club will not be short-lived.

Dan Ives, tech analyst at Wedbush Securities, said: ‘Nvidia’s guidance was a ‘drop the mic’ moment as investors now recognise this AI demand story is as real as any tech trend we have seen in the last 30 years. It is only comparable to the internet in 1995 and Apple’s iPhone launch in 2007.’

Danni Hewson, head of financial analysis at AJ Bell, said: ‘Confidence is a funny thing. Without it markets limp along as investors shun risk and double down on perceived safe havens. With it sectors soar, and that’s exactly what happened after Nvidia proved the AI phenomena is no flash in the pan.’

But it’s not just analysts who are bullish about Nvidia.

Windfall: Nvidia’s founder and chief executive Jensen Huang

‘A new computing era has begun. Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI,’ said Huang, who is known for his black leather jackets and a tattoo that looks like the Nvidia logo.

‘We have excellent visibility through the year and into next year,’ he added. ‘I think this is not a near-term thing, this is a long-term industry transition.’

And to truly underline this point, the company has said that it would buy back another £20billion of its shares, a move most firms make when leadership thinks the company is undervalued.

The company said it to ramp up production of its hardware into next year, appearing to silence doubts about whether this diner coffee-fuelled, start-up turned chip giant will keep growing.

The London stock market ended its two-day losing streak as heavyweight oil stocks rallied on the back of higher Brent Crude prices.

On a steady day of gains, the FTSE 100 rose 0.8 per cent, or 59.88 points, to 7587.30 while the FTSE 250 was up 0.51 per cent, or 95.66 points, to 18937.20.

It came as the price of Brent Crude added almost 2.5 per cent to reach more than $87 a barrel, its highest level since April.

That helped BP rise 2.6 per cent, or 12.65p, to 492.65p while Shell added 2.4 per cent, or 56.5p, to 2428.5p.

The oil market has remained tight due to production cuts led by Opec and its allies alongside concerns over Russian shipments. 

Gushing gains: The price of Brent Crude added nearly 1% to reach almost $87 a barrel, its highest level since April

Ukrainian president Volodymyr Zelensky yesterday vowed to fight back if Russia blocked its ports, sparking fears that supply in the Black Sea could be disrupted.

Michael Hewson, chief market analyst at CMC Markets, said: ‘With US inventory levels seeing large declines in recent weeks, the outlook for prices appears to be tilted more to the upside, unless fresh supply comes to market.’

Hill & Smith, the safety barrier maker, delivered a record set of half-year results following strong trading across its US businesses. 

Revenue of £420.8million in six months to the end of June were 20 per cent higher than the year before while profit surged 43 per cent to £62.5million.

It said its US businesses now made up 73 per cent of group profit, which is now likely to beat market expectations of £111.8million for 2023.

The shares rose 7 per cent, or 110p, to 1680p. But Hiscox headed in the other direction after the insurer sounded a note of caution regarding growth in its retail division. 

Stock Watch -RM

RM, which provides technology and resources to the education sector, fell 20.2 per cent, or 14.2p, to 56p after it said profit will be lower than hoped.

Consortium, its UK classroom supplies business, was hit by delays in launching an ecommerce platform and smaller school budgets, affecting results, as revenues of £87.6million in the six months to the end of May were down 11 per cent  against the same period a year ago.

It made a loss of £4.5million. Profit for the year should be ‘on or around break-even’.

The unit, which is made up of businesses in the UK, Europe, USA and Asia, reported a 5.5 per cent increase in insurance contract written premiums to £996million in the six months to the end of June.

But overall retail growth was hindered amid increased competition. Its insurance revenues of £1.5billion were 3 per cent higher than the same period last year while profits rose from £19.9million to £207.8million. Shares sank 6 per cent, or 67p, to 1046p.

Intercontinental Hotels Group rose 2.5 per cent, or 144p, to 5934p after target price upgrades from Morgan Stanley and JP Morgan, a day after the Holiday Inn and Crowne Plaza owner’s profits surged as travel demand rebounded.

The feel-good factor at IWG accelerated as investors made a dash towards the office space provider’s stock on the back of its positive sets. 

Yesterday it said revenue rose to £1.5billion in the first six months of this year, up 15 per cent on the £1.3billion it recorded in the same period of last year. Shares soared 9.8 per cent, or 14.8p, to 166.3p.

TP ICAP, the world’s largest interdealer broker, cashed in on higher oil and gas prices.

Profits of £91million in the first six months of this year were more than a quarter above the same period a year earlier while revenue rose 5 per cent to £1.13billion. 

It also launched a share buyback worth up to £30million, alongside freeing up £100million of cash to pay down debt six months ahead of schedule.

The shares climbed by 7 per cent, or 10.8p, to 165.3p.

Office space landlord CLS Holdings warned the property market will remain challenging until interest rates have peaked.

The bleak outlook came as the group swung to a loss of £106.4million in the first six months of 2023, having made a £21.3million profit the year before.

And the value of its portfolio at the end of June was 5.5 per cent lower than the same period last year.

CLS failed to make any acquisitions during the first half because of the tough market conditions and said it did not expect to for at least the rest of 2023. Shares slumped 8.5 per cent or 12.2p, to 131.2p.