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NVIDIA set to join the trillion-dollar club

NVIDIA was on track on Tuesday to breach $1 trillion in market capitalization for the first time, making it the first US chipmaker to join the club.

The company's shares were last up 3.5% at $402.91 in premarket trading.

Meta, valued at about $670 billion as of last close, clinched the trillion-dollar market capitalization milestone in 2021, while Apple, Alphabet, Microsoft and Amazon are the other US companies that are part of the club.

AI took center stage after NVIDIA stunned investors with a revenue forecast last week that surpassed analysts' expectations by more than 50%.

Wall Street analysts called NVIDIA's forecast "unfathomable" and "cosmological", hiking their price targets in droves. The highest price target valued the company at about $1.6 trillion, on par with Google-parent Alphabet.

NVIDIA's shares rose about 25% last week sparking a rally in AI-related stocks and boosted other chipmakers, helping the Philadelphia SE Semiconductor index close on Friday at its highest in over a year.

OpenAI-owned ChatGPT's rapid success has prompted tech giants such as Alphabet and Microsoft to make the most of generative AI, which can engage in human-like conversation and craft everything from jokes to poetry.

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