Until two years ago, Nvidia was largely unknown to the general public. Today, the US microchip manufacturer has become the most valuable company in the world by market capitalization, thanks to the boom in artificial intelligence. The American chip giant Nvidia has soared to the top of the stock market amid the euphoria surrounding artificial intelligence (AI). On Tuesday, the company’s market value reached a staggering $3.33 trillion, surpassing tech giant Microsoft.
Nvidia plays a crucial role in AI applications. Its chip systems are used to train AI software in data centers and are increasingly deployed for their operation. Rivals such as Intel and AMD have yet to offer significant competition in this market.
The US company has continued its rapid ascent over the past 18 months. Just two weeks ago, Nvidia became the third company in history to surpass the $3 trillion mark on the stock exchange, joining the ranks of Apple and Microsoft.
Nvidia’s stock has shown the best performance over the past 25 years, according to calculations by Bloomberg. Since its IPO in 1999, the stock’s value, including reinvested dividends, has increased by an astonishing 591,078 percent. In other words, one dollar invested back then would now be worth over $5,900.
Until two years ago, Nvidia was known primarily as a manufacturer of graphics card chips for gaming computers. The foundation for today’s success is the technology Nvidia originally developed for graphics cards. It later became apparent that these systems are much more efficient at AI training than traditional processors. Nvidia had the right technology at the right time, and with the onset of the AI boom, the chipmaker’s meteoric rise began.
Quarterly Profit of $15 Billion
Recently, it has become increasingly clear that the demand for AI software is driving Nvidia’s explosive growth. In the past quarter alone, revenue jumped 262 percent year-on-year to $26 billion. Simultaneously, quarterly profit skyrocketed from $2 billion to nearly $15 billion.
Nvidia’s 61-year-old CEO, Jensen Huang, a co-founder and charismatic showman, promises that this is just the beginning of a computer revolution. Huang believes that in the future, most content will not be pre-stored but generated on the fly by AI software based on the current situation. For example, one could interact with building technology via a chatbot instead of accessing data elsewhere.
Nvidia is preparing for this future with a new chip generation called “Blackwell.” With the current system, “Grace Hopper,” Nvidia trained the chatbot ChatGPT within three months using 8,000 Nvidia chips and 15 megawatts of power. Huang claims that “Blackwell” can achieve the same with 2,000 chips and four megawatts.
CEO Rises in the Ranks of the World’s Wealthiest
If Huang’s visions of the future prove accurate, Nvidia’s business will continue to expand. Investor confidence in these prospects is one of the drivers behind the recent surge in Nvidia’s stock price. The stock is currently worth about ten times more than it was in September 2022. Huang himself has climbed to 12th place in Bloomberg’s list of the world’s richest people, with an estimated net worth of $115 billion.
Nvidia also operates the “Omniverse” platform, which allows companies to better manage their factories using digital twins, and supplies automotive computers for driver assistance functions to companies like Mercedes.