He chip maker Nvidia This month, for the first time, it surpassed Microsoft and became the most valuable company in the worldwith a market capitalization of 3.3 trillion dollarsAlthough its reign at the top of the charts was brief, it capped a rapid rise for the company, which was little known outside tech circles just two years ago.
For most of its three decades of existence, Nvidia was primarily a niche player, making computer chips for video gamebut the company’s central position in the rise of artificial intelligence has led her to a spectacular rise.
Nvidia sells the units graphics processing (GPU) and the crucial software to train and run the AI algorithms that drive the chatbots and the image generators.
Here’s how Nvidia has become one of the most valuable companies in the world.
– Date: January 22, 1999
– Market capitalization: Less than $1 billion
Nvidia went public in January 1999 at $12 a share, six years after it was founded and a year before the dot-com bust wiped out much of the stock market value of the burgeoning Internet industry. The company was building a reputation for making some of the best video game chips and, in 2001, won a contract to supply GPU to the console Microsoft Xbox games.
– Date: November 4, 2021
– Market capitalization: 743.8 billion dollars
Nvidia had long been listed in professional investment firms, but during the pandemic, millions of people with day jobs got into stock investing through apps like Robinhood and online forums like Wall Street Bets. Gamers-turned-retail investors recognized Nvidia as the company that helped drive the improvement of video game graphics in the last two decades.
In 2021, Facebook renamed itself Meta and renewed interest in the concept of metaversea future in which people spend much of their time connected to a virtual world. He CEO of Nvidia, Jensen Huangjoined the idea and stated that the chips from your company they would power the future world of the metaverse. He even used a digital clone of himself at Nvidia’s annual conference to showcase the technology.
The big plans of Goal for him metaverse have not yet materialized, but at the time some investors were betting that it was the next big revolution. On November 4, 2021, financial analysts at Wells Fargo released a report detailing that Nvidia was well positioned to benefit from the prophesied metaverse boom, and shares soared 12%.
– Date: February 22, 2023
– Market capitalization: $582.3 billion
By the end of 2022, OpenAIa laboratory of artificial intelligence Founded as a non-profit organization in 2015, it presented ChatGPT. He was more capable than any chatbot that normal people would have interacted with until then. The tech industry was captivated, and within months, Microsoft had invested billions in OpenAI. The arms race of AI had begun.
The chips and the software from Nvidia are crucial to creating the “great linguistic models” that serve as underlying technology in ChatGPT and in image generators like Dall-E 3 by OpenAIwhich was launched in 2023.
On February 22, 2023, Huang He told investors that the company would benefit from the rise of AI, which was rapidly gaining traction. Wall Street He was convinced and the shares soared 14% to give the company a total value of $582.3 billion.
– Date: May 24, 2023
– Market capitalization: 1 billion dollars
Nvidia shares continue to rise. In May 2023, Nvidia presented results that demonstrated for the first time with real figures that it was one of the main beneficiaries of the AI frenzy. Shares rose 25% and the company’s valuation briefly surpassed $1 trillion, one of the few companies to reach that figure.
As the company posted higher revenue numbers, more investors poured into its capital, pushing the stock higher until it ended the year at a value of 1.2 trillion dollars. Since many of the new companies in AIincluded OpenAIare not public, there were few options for ordinary people to invest in the boom of the AI. Many bought shares of Nvidia.
– Date: May 22, 2024
– Market capitalization: $2.6 trillion
In the first quarter of 2024, Nvidia’s revenue amounted to $26 billion, up from $7.2 billion in the same period a year earlier.
The start-ups of AIcompanies trying to add AI to their products and the venture capital firms they try to get hold of them Nvidia chips, which drives up its price. But the biggest buyers are the big technology companies Microsoft, Amazon, Meta and Googlewhich they need chips to build and train their own AI models.
At the beginning of the year, Microsoft, Meta and Google informed their investors that they would increase their investments in AI. Google alone plans to spend at least $12 billion every four months this year. Much of that money will go directly into the coffers of Nvidia.
(c) 2024, The Washington Post
