On Tuesday 23rd of May morning, Nvidia reached a market valuation of $1 trillion as a result of the growing demand for generative artificial intelligence tools in the tech industry. Both major tech companies and smaller enterprises are actively incorporating AI capabilities into their products, and AI tools dominated the recent Google I/O and Microsoft Build presentations. Nvidia's chips have positioned the company as a crucial supplier for businesses aiming to develop AI-powered solutions. Those that bought Nvidia and saw the potential are grinning ear to ear. Those who invest in the stock market understand how much slower or incremental the stock market moves in comparison to the crypto markets, so this was a huge play for Nvidia.
Microsoft, Apple, Saudi Aramco, Alphabet, Amazon and, as of last week Nvidia. The club of listed companies with a market capitalization of over $ 1,000 billion has a new member, the first to produce chips. Nvidia crossed the threshold on the morning of Wall Street. Nvidia is now occupying the same air as the likes of Google and Microsoft, alas it's like Nvidia is to become a notorious tech super giant and join the big boys club after all. The last quarterly earnings report showcased over $2 billion in profit in the last thee months. Since the pandemic there has been lots of demand for PC gaming and cryptocurrency mining gear.
1 | Apple
Capitalization: 2,792 billion
2 | Microsoft
Capitalization: 2,466 billion
3 | Saudi Aramco
Capitalization: 2,065 billion
4 | Alphabet ( Google )
Capitalization: 1,571 billion
5 | Amazon
Capitalization: 1,246 billion
6 | Nvidia
Capitalization: 1,009 billion
7 | Berkshire Hathaway
Capitalization: 701.2 billion
8 | Meta Platforms ( Facebook )
Capitalization: 679.36 billion
9 | Tesla
Capitalization: 634.36 billion
10 | Tsmc
Capitalization: 532.87 billion
In the previous autumn, CEO Jensen Huang acknowledged an excess of gaming GPUs, leading to their sale at reduced prices. However, by the time Nvidia's subsequent report arrived in February, the outlook appeared more promising. Huang emphasized the potential of Nvidia's data center growth, and the latest report showcased a new record in data center revenue. This is because Nvidia produces chips that are used to power AI.
Nvidia, established in 1993, initially focused on designing chips for the gaming industry. During its early years, the company experienced growth through the surge of cryptocurrency, as its processing technology became instrumental in mining digital coins. Many people associated Nvidia with the crypto arena and that's why the stock price very much impacted by fluctuations within the crypto market. This is why Nvidia's stock price declined throughout 2022 due to the downturn in the crypto market.
Nonetheless, Nvidia's prominence as the leading chipmaker for AI technology has attracted significant investment from Wall Street. As businesses compete to embrace and implement AI, Nvidia's chips play a crucial role in providing the substantial processing power required for developing new applications. The Nvidia GPU which was created in 1999 with the purpose of supporting 3D graphics in PC and video games, thanks to their notorious processing capabilities supported by thousands of computing cores, actually have been amazing for running deep learning algorithms.
UBS estimated that the creation of ChatGPT alone necessitated the use of 10,000 Nvidia chips. According to Thomas Hayes, the chair of Great Hill Capital, Nvidia currently serves as a prominent symbol of the AI industry. As the market grapples with the reality of this AI trend, Nvidia stands out as a prime example of its potential.
The hardware and software company helped power the deep learning "revolution" over a decade ago. Nvidia shows few signs of losing it's lead as generative AI explodes with tools like ChatGBT. The earlies pioneers in AI have been supported by Nvidia, they really have been at the forefront of AI development.
Things like ChatGPT and DALL-E 2 have launched generative AI into the public's awareness in a transformative way. Probably similar to perhapics the dawn of the iPhone. OpenAI post likely wouldn't have had the possibility to run without Nvidia. Today's massive generative AI models require thousands of GPU's to run and Nvidia holds about 88% of the GBU market allegedly. This comes under the understanding that OpenAI reportedly used 10,000 Nvidia GPU's to train ChatGBT!
