Nvidia's market value exceeds three trillion dollars, surpassing Apple.
In the initial stages of the AI revolution, Nvidia's stock value was at $150. Now it's worth eight times that amount. The rapid uptick in the share price has made Nvidia more valuable than Apple. The future looks promising.
The AI revolution propelled Nvidia's market value to surpass $3 billion. A 5% increase in their stock price to $1224.40 on Wednesday sparked this growth, with an additional 1% rise in after-hours trading.
Nvidia has surpassed Apple in terms of market value thanks to the stock increase, placing them at number two behind Microsoft. Microsoft is also a hot pick among investors due to its potential implementation of AI technology into daily office use. Nvidia's chips are crucial for the AI software data centers, and they sell thousands of chip systems to tech giants like Microsoft, Google, and Meta.
Apple is anticipated to make AI announcements at their upcoming developer conference, WWDC, next week. Reports suggest a possible partnership with OpenAI. As a result, Nvidia benefits: their chips play a significant role in these AI software data centers. Nvidia sells chip systems to the three mentioned companies.
Massive revenue growth
This upward trend in sales is propelling both the stock price and company market value. Nvidia experienced a 262% increase in sales this quarter, from $7.2 billion last year to $26 billion — an immense jump. Moreover, there's still high demand for their powerful new chip systems, with supply shortages reported to last into next year. When the AI boom began in early 2023, Nvidia's stock was around $150. This year, the stock price has soared from $500 to well over $1200.
Nvidia's technology initially focused on graphics cards, but its capabilities in AI applications were soon recognized. Nvidia's chips are now indispensable for the AI future, and the company benefits from the business in the associated software and services.
Potential for a more consistent business model
Now, Nvidia technology is not just used for training but also for operating AI applications. According to CEO Jensen Huang, this could lead to a more stable business model. The learning process requires immense computing power but occurs only once for each AI model. Huang also predicts that AI will generate various forms of content in the future that are currently sourced from databases.
Nvidia is also active in the digital twin market, helping companies optimize processes in their factories using virtual replicas. Additionally, they sell computers for self-driving and autonomous vehicles. Their major competitors, such as Intel and AMD, are striving to participate in the AI boom, but Nvidia has held onto their leadership position so far.
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The rapid increase in Nvidia's stock price, reaching $1224.40 on Wednesday and further growing by 1% in after-hours trading, contributed to their market value exceeding Apple's, making Nvidia's share prices a hot topic among investors. With Nvidia's chips being essential for AI software data centers and their sale to tech giants like Apple, Google, and Meta, their massive revenue growth of 262% this quarter, from $7.2 billion to $26 billion, has further bolstered their position in the market.
