Tech Optimism Behind Nvidia’s Unprecedented Rise?

Team Veye | 07-Jun-2024

Nvidia had a meteoric exponential rise, so much so that they pipped even Apple in market cap, hitting $3 trillion mark on Wednesday. Previously, it was only in 2002 that Nvidia's value had exceeded that of Apple and that was five years before the first iPhone's release. 

The company’s shares rose to record highs, before shedding some gains on the news of its Chief Executive selling some of his stock. Nvidia first-quarter results beat the estimates with sales climbing 262% to $26 billion while earnings at $6.12 per share surged 461%.

According to Bloomberg, combined Microsoft Corp., Nvidia Corp. and Apple Inc. exceeded China’s stock market, excluding Hong Kong.

Tech optimism around artificial intelligence (AI), has propelled tech shares to new highs. The company is showing no signs of abating with it revealing its plans to upgrade Nvidia AI Accelerators.

Nvidia has now established itself well as a dominant force in the technology landscape. With its advanced graphics processing units (GPU) and system-on-a-chip (SoC) solutions, Nvidia Technology has become the go to provider for the gaming, professional visualization, data center and automotive industries.

Hewlett Packard Enterprise has declared that its AI servers using Nvidia’s H100 chips have strong demand and Nvidia AI research remained the leader.

Nvidia has revealed its plans to roll out its most advanced artificial intelligence platform in 2026. The Company would also be using next generation memory to improve process time.

Nvidia shares had risen earlier after Tesla’s indication that Nvidia Company would be a supplier for their AI startup xAI. 

Investors continue to remain bullish on Microsoft, Apple and Nvidia due to their powerful competitive positions, high profit margins and strong balance sheets. The AI chip leader announcing a 10-for-1 stock split will bring the price of one share down to just over 100. The split could be more effective than just lowering the price of each share. It could facilitate in making Nvidia a candidate for the Dow 30, which is a price-weighted index.

As the demand for advanced computing power and cutting edge technology continues to grow across various industries, Nvidia new technology is well positioned to capitalise on a wealth of growth opportunities. Its expertise in GPU and AI and high performance computing has made it a strategic partner for leading organisations in different sectors.

Nvidia has secured the best advantage from a surge in AI spending, propelling the company to become the world's most valuable company.

Nvidia shares have been climbing higher and higher as its AI business has developed, growing more than 3,290% over the past five years. The stock has the potential to dip, which may be short lived though, after stock split.


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