Nvidia Hits $3 Trillion in Market Value

Nvidia has become one of the main beneficiaries of the so-called artificial intelligence boom, as evidenced by the financial performance of its activities, which continue to set new records.

Nvidia Hits $3 Trillion in Market Value

The mentioned company’s market capitalization has reached the $3 trillion mark. It is worth noting that Nvidia became the first company specializing in the development of computer chips, which was able to demonstrate the specified result. Since the beginning of the current year, the share price of this firm, based in Santa Clara, California, has been on a trajectory of rapid growth. The corresponding figure for the period from January 1 to June 5 increased by 147%. Against this background, the company’s market capitalization has grown by about $1.8 trillion. During 2023, the firm’s securities rose in price by 239%.

Nvidia chips are used to implement the training process and the subsequent operation of artificial intelligence systems. Currently, there is a high level of demand for relevant products against the background of what can be described as intense global interest in AI. Artificial intelligence found itself in the zone of increased attention after OpenAI presented ChatGPT in 2022, which demonstrated impressive cognitive abilities.

Last Wednesday, June 5, Nvidia’s share price rose by 5.2%, reaching $1,224.40. Against this background, the company’s market value has crossed the landmark and historical milestone of $3 trillion. In terms of the mentioned indicator, Nvidia is ahead of Apple. This circumstance is a reflection of the fact that within the framework of the current configuration of technological reality, artificial intelligence is the main driving force of development. In the context of the impact of the corresponding fact on the business, the mentioned thesis means that profit growth is the most realistic prospect for those companies that either offer the material components necessary for the functioning of machine intelligence systems or elaborate digital products based on virtual thinking configurations. In terms of the technological content of its items, Apple has lagged behind progress in the area of artificial intelligence to a certain extent, although it has ambitions to evolve in the appropriate direction, which are expected to be publicly outlined next week at the Worldwide Developers Conference. It is worth noting that currently ignoring AI is the beginning of the road to nowhere.

The last time Nvidia’s market value exceeded that of Apple was in 2002, five years before the debut of the first-generation iPhone. At that time, both companies were valued at less than $10 billion each.

A slowdown in Nvidia’s growth rate shortly is unlikely. The positive prospects are largely because the artificial intelligence industry is currently on a high-intensity development trajectory. AI is the main driving force of progress at the current stage of human civilization’s existence. It is worth noting that artificial intelligence, due to its significant cognitive capabilities, which, according to the opinion circulating in the expert community, may surpass the power of the human mind shortly, not only contains an impulse for the evolution of the technological environment but can also become a factor influencing a certain transformation of the state of affairs in the space of economics, political plane and cultural the dimension of life. Against the background of the relevant prospects, the probability of a decrease in interest in AI is near zero. At the same time, for the existence of artificial intelligence as a technology with the prospect of a kind of transmutation into something like an autonomous substance of digital thinking, chips are needed, the main global supplier of which is Nvidia. Also, the company’s positive business prospects are being formed based on the current scaling tendency, within which emergence there are more and more startups in the AI industry, and the number of digital products with a virtual cognitive element is rapidly increasing.

Nvidia Chief Executive Officer Jensen Huang last week announced the company’s intention to update its so-called artificial intelligence accelerators annually. According to media reports, the rise in the share price of the firm on Wednesday increased his wealth by more than $5 billion. The corresponding figure reached the $107.4 billion mark.

Jensen Huang, during a speech at the National Taiwan University, stated that the rise of generative artificial intelligence is a new industrial revolution. Also in this context, he noted that Nvidia is striving to play a major role in spreading advanced technology to personal computers.

It is possible that the company headed by Jensen Huang is not just one of the biggest, but the main beneficiary of large-scale spending on artificial intelligence. Amid the global growth of interest in AI, Nvidia has managed to become a competitive participant in the race for the title of the most valuable firm in the world. From the point of view of the corresponding indicator, the company is still inferior to Microsoft’s position, but its prospects and continued rapid growth indicate that the current configuration of the ratio of financial indicators may soon change. There is a widespread opinion among Wall Street experts that the probability that Nvidia will become the most valuable firm in the world is the maximum and can actually be described as a matter of time.

Apple is currently on a trajectory of losing market positions. The technology giant’s share price is showing a decline amid concerns about falling consumer demand for iPhones in China and a fine from the European Union. It is worth noting that in the current year, the dynamic of Apple securities demonstrates certain improvements, which at the same time do not radically change the situation in which the company finds itself. Investor sentiment towards the technology giant’s prospects is becoming more optimistic.

Currently, Apple’s market capitalization is around $2.99 trillion. Nvidia has reached the level of $3.019 trillion on the corresponding trajectory of financial indicators. Microsoft’s market capitalization is $3.15 trillion.

In more favorable periods of its history, Apple has consistently managed to become the first company with a market value of $1 trillion and $2 trillion. For a long time, the technology giant was a leader in the context of the mentioned indicator, but this year it lost ground to Microsoft, which is currently actively integrating artificial intelligence into its digital ecosystem. The specified technology giant is also cooperating closely with OpenAI.

It is worth noting that the mentioned Nvidia result contributed to the fact that on Wednesday the S&P 500 and Nasdaq indexes closed at new record highs.

Currently, the company, headed by Jensen Huang, accounts for about 70% of the sales of artificial intelligence semiconductors. Experts suggest that shortly, the corresponding indicator may show growth. Angelo Zino, senior equity analyst at CFRA Research, underlined in a note published on Wednesday that Nvidia is rapidly becoming the most valuable company, given the many ways artificial intelligence can be monetized. The expert also stated that the company has opportunities to expand the market across the technology sector.

It is known that Nvidia shares will become more affordable soon. Last month, the company announced a 10-for-1 stock split, making buying shares in the red-hot semiconductor firm more accessible to individual investors. Trading of post-split shares will begin on June 10.

Nvidia’s total product sales reached $26 billion in the quarter ending April 28, 2024. This indicator is more than three times higher than the result for the same period last year. The company also expects its revenue for the current quarter to reach about $28 billion. This figure exceeds Wall Street expectations.

Jake Dollarhide, chief executive officer at Longbow Asset Management, says Nvidia is currently making money from artificial intelligence, and companies like Apple and Meta are spending money on AI.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.