Investors who placed their bets on NVIDIA in its early days (lucky devils) are now reaping the benefits, it seems: Today, NVIDIA’s stock reached an unprecedented peak, hitting $584.87 per share by midday, marking a notable 18% rise in the early weeks of 2024 and a staggering 179% over the past year. This spike in the company’s stock value has propelled its market cap towards an impressive $1.5 trillion.
NVIDIA’s ascendancy in AI isn’t an isolated phenomenon. Competitors like AMD and Intel have also seen their stocks soar, with AMD hitting a high of $168.60 and Intel experiencing a 57% increase over the same period. The AI industry’s rapid expansion is fueling this growth across the board.
Mark Zuckerberg, CEO of Meta, recently underscored NVIDIA’s industry dominance by announcing a massive investment in NVIDIA chips for Meta’s AI projects, as reported by the AI Insider. Zuckerberg’s plan includes building an AI infrastructure with 350,000 NVIDIA H100 chips, aiming to develop general artificial intelligence (AGI) and open-source Meta’s general AI for broader use and collaboration.
NVIDIA’s market leadership extends beyond its hardware. The company boasts a commanding 70% to 90% share of the global AI chip market, thanks largely to its innovative Cuda software, widely used by developers to create AI platforms. This software has been pivotal in maintaining the company’s edge over competitors.
However, NVIDIA faces challenges from rivals like the aforementioned AMD, which recently introduced its MI300 accelerator, and Intel’s development of its Gaudi3 AI accelerator. Both are direct competitors to NVIDIA’s data center accelerators. Moreover, hyperscalers such as Microsoft, Google, Amazon, and Meta are increasingly developing their own AI chips, known as ASICs, tailored to their specific needs. These ASICs could potentially diminish NVIDIA’s share in the AI GPU market.
Despite these emerging threats, the AI industry’s explosive growth suggests a vast untapped market. NVIDIA’s position as the AI king might face challenges, but the company’s revenue is expected to continue its upward trajectory with the overall expansion of the AI sector.
While the company that was founded way back in 1993 by Jensen Huang and others reigns supreme in AI for now, the rapidly evolving landscape of AI technology, marked by increasing competition and innovation, indicates a dynamic and exciting future for the industry.
