AI Tokens See Double-Digit Gains as Market Cap Doubles Within a Month
The recent surge in AI tokens has drawn attention, with many pointing to Nvidia’s impressive earnings report as a key factor. However, a closer look at the data reveals that AI tokens have been steadily climbing over the past month, showcasing robust growth even amidst broader market fluctuations.
On February 21, numerous artificial intelligence (AI)-based crypto tokens and traditional stocks demonstrated notable gains, defying a general market downturn. Notably, leading AI-based crypto tokens exhibited remarkable increases, with some experiencing double-digit growth following a significant expansion in their market capitalization over the preceding month.
For instance, Render (RNDR), an Ethereum-based network facilitating decentralized graphics processing unit rendering, surged by over 17% in a 24-hour period. Similarly, The Graph (GRT), an indexing protocol for efficiently querying blockchain data, saw an 18% increase in the same timeframe. Other tokens like Fetch.ai (FET) and SingularityNet (AGIX) also recorded substantial gains of 11% and 33%, respectively.
The collective market capitalization of AI-based tokens has surged by over 9%, reaching a staggering $17.8 billion since Nvidia’s quarterly earnings report, marking a significant rise from $7 billion earlier in February.
One notable event contributing to this uptrend was OpenAI's announcement of its text-to-video tool, Sora, on February 15, which led to the highest weekly trade volume for AI tokens in a year.
While many initially attributed the positive momentum of AI tokens to Nvidia’s stellar fourth-quarter earnings report, where the chipmaker exceeded market expectations with revenues of $22.1 billion compared to the projected $20.4 billion, Nvidia CEO Jensen Huang shed light on another crucial factor. Huang highlighted the surge in global demand for generative AI as a driving force behind the boost in sales and revenue. This acknowledgment propelled Nvidia to a market capitalization of $1.67 trillion, surpassing Tesla as the world’s most traded stock.
The ripple effect of Nvidia’s success was evident in the AI crypto market and also extended to several AI-focused stocks, which achieved new highs. For instance, Taiwan Semiconductor Manufacturing Company (TSMC), a key supplier for Nvidia, witnessed a 2.05% increase in its stock price during morning trading on February 21. Similarly, Super Micro Computer, a server component supplier, saw its stock price rise by 11.42% during after-hours trading on February 20. Furthermore, Dutch chip equipment manufacturer ASML experienced a 2.7% uptick during after-hours trading.
