AI tech supplier Nvidia has exceeded all expectations by overtaking the world’s biggest tech companies to become the most valuable company on the planet.
AI Darling Takes Over
We may be witnessing an unstoppable force, as tech wunderkind and AI darling Nvidia has continues to make miraculous progress on the global markets, even overtaking industry godfathers Apple and Microsoft.
Taking the Crown
Now, Nvidia is sitting at number one as the most valuable company in the world. On Tuesday the company closed with a staggering market capitalization of $3.34 trillion.
The Big Three
The three most valuable companies are now coming neck-and-neck. On the same day, Microsoft closed with a value of $3.32 trillion, and Apple closed in third with $3.32.
Rising and Falling
While Nvidia’s share values rose by 3% during the day, Microsoft fell by 0.5% and Apple fell 1.1%.
Two Major Milestones in 2 Weeks
The rise of the Santa Clara-based company has been undeniable for months. Just two weeks ago it hit a major $3 trillion market cap milestone for the first time, only the third company to ever do so alongside Apple and Microsoft.
Founded 3 Decades Ago
While the company was founded in 1993 by Taiwanese-American engineer Jensen Huang, it has entered the public consciousness with a vengeance in the last year and a half.
Major Supplier for AI Innovation
Now, Nvidia is the largest supplier of parts that are instrumental in building data centers to power artificial intelligence language learning models, supplying companies like Open AI, Meta, Amazon, Elon Musk’s Tesla and xAI, and even Microsoft.
The H100 Chip
The company’s H100 graphics processor unit (GPU), also known as the H1-00 chip, is in especially high demand. It is currently the superior tool for powering the world’s foremost generative AI applications including Chat-GPT, an OpenAI creation that can generate text, speech, images, and more.
Unparalleled in the Industry
Nvidia chips are currently unparalleled by any of its competitors, as far as AI systems are concerned. As a result, the company has an 80% share of the processor market.
In Extremely High Demand
As AI research and innovation become an increasing point of focus for the world’s largest tech companies, Nvidia’s value and power have risen with it. These companies are rushing in to snap up as many processing chips as they can afford – or as many as Nvidia has in stock.
Unlikely to Stop
Since the importance of AI is unlikely to wane in the coming years, demand for Nvidia’s hardware and software is unlikely to stop either.
Invention of the Century?
Some market analysts even believe that its significance is still underestimated. According to CFRA Research analyst Angelo Zino, the H100 chips may prove to be the most important invention of the 21st century.
Of Civilizational Importance
The company will be “the most important company to our civilization over the next decade as the world becomes more AI-driven,” Zino believes.
Is It Sustainable?
However, some finance experts are more skeptical, questioning whether the continued ascent of the company will be sustainable long-term, or if it has already hit the ceiling in terms of economic growth.
It Needs to Keep Growing
“NVDA’s run has been incredible, but it will need to keep growing from here and stave off competition if its stock is going to keep putting up stellar returns,” said analysts at Bespoke Investment Group.
Exponential Growth
Since the beginning of the calendar year, the company has grown exponentially, with its share value rising by an astronomical 170% over 6 months.
5 Years of Unprecedented Growth
Even this is a minuscule amount compared to its trajectory over the last 5 years. Since midway through 2018, Nvidia shares have exploded by 3,477%.
Missing from the Top 20
Despite operating for more than 30 years, 5 years ago Nvidia did not even rank in the world’s 20 most valuable companies.
Most Growth in Recent Years
Now it is the first company in 5 years to outpace both Microsoft and Apple. The last was Amazon.com, which held the world’s largest market cap in February 2019.
Founder’s Billion-Dollar Net Worth
Founder and former CEO Huang, a major individual shareholder with a 3% share in the company, now has an estimated $118.7 billion network, making him one of the world’s wealthiest people.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
