FX168 Financial News (Europe) News Driven by chip demand and investors' enthusiasm for artificial intelligence (AI), Nvidia's stock price has exploded for several months, surpassing Microsoft and Apple to become the most valuable listed company in the world. Nvidia CEO Wong In-hoon once took 20% of Nvidia's shares for $200, creating a new round of legends for the US stock market.
US stocks closed on Tuesday (June 18), and Nvidia's stock price rose 3.5% to 135.58 US dollars. The market capitalization reached 3.335 trillion US dollars, surpassing Apple and Microsoft, which have been competing for the top spot in the US stock market for a long time.
(Source: Trading View)
Nvidia is a major beneficiary of the surge in demand for chips that can train and run powerful generative AI models, such as ChatGPT, an AI chatbot under OpenAI. In less than two years, it went from being a $300 billion company fueling chip surpluses due to a bursting bubble to one of the world's most powerful tech companies, with other Silicon Valley giants lining up to buy its latest products. #AI热潮 #
(Source: Financial Times)
The company's stock price has risen sharply, driving up 14% of the S&P 500 so far this year, a rise that has shocked even bullish observers.
“The current market is dominated by animal spirits and human emotions,” said Ted Mortonson (Ted Mortonson), a strategist at Baird Technology. “Don't get me wrong, Nvidia is a fantastic company. There are many factors driving the stock up, but it's not normal for it to rise 40% in a month.”
Nvidia is headquartered in Silicon Valley and mainly manufactures computer graphics cards for video game players. Over the past year, the company experienced several consecutive quarters of significant revenue growth, announcing a 265% year-on-year increase in February and a 262% year-on-year increase in May. Since the beginning of this year, its share price has risen by about 170%.
Hwang In-hoon claims that the company is at the center of a new “industrial revolution”, unleashing the power of generative artificial intelligence to transform all areas of the global economy with intelligent computing.
Google, Microsoft, and Amazon have all purchased their Hopper series graphics processors for their cloud services. Nvidia's software ecosystem, Cuda, has solidified its dominance by providing tools for developers using its chips.
Meanwhile, Nvidia is launching a new generation of more powerful Blackwell chips, and Hwang In-hoon promised to launch new products on a “one-year cycle”. Competitors such as AMD (AMD) and Intel (Intel) have also launched competitive AI chips, but they have yet to actually encroach on Nvidia's dominant market share.
“Someone always has to be number one. Nvidia's stock price did not rise by itself; financial indicators are rising faster,” Bernstein chip analyst Stacy Rasgon (Stacy Rasgon) said. “Judging from actual economic factors, I've never seen a situation like this before, which is amazing.”
The race for generative AI opportunities has taken the tech industry by storm. At the annual developer conference last week, Apple also joined in, announcing that it will embed its own set of generative models into its new operating system and signed an important cooperation agreement with OpenAI.
Nvidia's growing influence on the market index has raised concerns about the long-term sustainability of the market rebound, yet few analysts or investors predict a reversal in the short term.
Of the 72 Nvidia stock price analysts tracked by Bloomberg, only 1 rated the stock as “sold.”
“This heavy market situation is really worrying. We are at a concentration level not seen since 1999. This is problematic,” said Hans Olsen, chief investment officer of Fiduciary Trust, a $23 billion wealth management company. “But if you think back to the tech bubble from 1997 to March 2000, you'll see that it still has a long way to go, and this time too.”
Since its inception in 1926, Nvidia is the 12th company to lead the S&P 500 Index. For more than a decade, Apple and Microsoft have been vying for the status of the most valuable companies in the US and the world.
The last time an American company surpassed the market capitalization of these two companies was in 2011, when ExxonMobil was the most valuable company in the US.
Recently, a video was released on the market. Hwang In-hoon shared the story of his early days in founding Nvidia.
He said that when he first went to the law firm to register his company, his lawyer asked him how much money he had now and needed to price the company's shares. Wong In-hoon answered that I had $200 in my pocket, so he got 20% of Nvidia's shares for 200 US dollars, making him laugh that this was a good deal.
(Source: Youtube)
He pointed out that the other two co-founders, Chris Malachowsky and Curtis Priem, also obtained the same shares at the same price; things are just that simple. Currently, Hwang In-hoon owns about 3.6% of the shares, worth about 36 billion US dollars.