Posted on June 19, 2024
It is one of the fastest-growing stories in the market, especially for Nvidia company. This is a multinational company and two years ago it had market capitalization in excess of $ 400 million. And within a single year, it has jumped from $1 trillion to over $3 trillion.
Microsoft is getting challenged by an upstart company from Cupertino, California. For shareholders, the new king is the stock market.
On Tuesday, Shares of Nvidia surged, passing past tech’s giants Hewlett Packard Enterprise Company and Hewlett Packard Enterprise Co. to become the biggest-public listed company globally, data from S&P Global showed. The growth has benefitted from the exponential rise in generative artificial intelligence and increasing use of chips or graphics processing units, or GPUs for creating Artificial Intelligence.
A strong and powerful wave of growth defines Nvidia as it belongs to the most rapidly growing companies in the history of the particular market. The company, which valued over $ 400 million just two years ago, has retreated badly of late. It was actually at $1 trillion last year and this fiscal year it has gone up to more than $3 trillion.
Nvidia prepaid Tuesday, by 3. 6pct increased its market capitalization to $ 3. 34 trillion. Both Microsoft and Apple declined during today’s trading, shrinking to below the market value of the California-based chipmaker from Silicon Valley.
Long before other similar large-scale chip manufacturers, Nvidia CEO Jensen Huang made a smart guess that GPUs would be crucial for constructing AI, and Nvidia was adjusted to suit what Huang regarded as the next breakthrough in tech.
The last big bet is also paying off. There are various ways to calculate the market share; by some estimations, Nvidia has over 80% of the market of chips used by AI systems. Two of Nvidia’s largest customer compete for ordering chips to run computers in their massive data centers, while looking to develop in-house AI chips as not to overly rely on one vendor.
“This was not fully understood or valued by anyone else,” added Daniel Newman, CEO of the Futurum Group – a tech consulting and market research practice. “They saw the trend and responded by building for the trend and at the same time, enabling the market. With such systems in place, they can comfortably claim whatever they desire.
Huang has become the talk of the town nowadays due to Nvidia’s rise to the top. It took place after a computer conference in Taiwan this month, where he was mobbed by those who wanted his signature; one of these was a woman demanded he sign her chest.
The firm may be compared to such giants of companies that grew during the dot com era like the Cisco and Juniper Networks that supplied equipment necessary to run communication networks for the internet. The company has seen its shares climb over a thousand times since the time it went public in 1990 to the peak in 2000 where it was the world’s most valued company.
The actual value of Nvidia has increased at quite a rapid pace for an organization hardly a decade old. Apple again reached the $1 trillion mark in August 2018 and was the first $3-trillion company in June of the following year. Microsoft too was able to grow from $1 trillion to $3 trillion within almost five years time.
But, Nvidia investors are more aiming at its future possibilities rather than relying on its existing incomes. Microsoft and Apple companies earn over $85 billion in annual operating profits, and Nvidia makes about $42. 6 billion.