Welcome to the AI arms race.
Nvidia is now worth almost $2 trillion – and we’ll show you where all that money comes from.
It was a Valentine’s Day much like any other: flowers, candy, red wine – and $1.83 trillion. That was the giant number we saw on the news that day, courtesy of Nvidia, the technology company based in Santa Clara, California. Their market cap became the fourth highest in the world, ahead of Alphabet, the owners of Google.
This is a very big deal indeed. Breaking into the Top 4 like this is comparable to Manchester City becoming a soccer powerhouse in the English Premier League, after years of domination by Manchester United, Liverpool, Chelsea and Arsenal.
Except Nvidia still have miles to go before they reach the top. They’re still in fourth place at press time, moving up to US$1.959 trillion in market cap; still, it looks like Nvidia has left both Alphabet (now No. 6 at $1.696 T) and Amazon (No. 5 at $1.803 T) in the dust.
How did this all happen? And will Nvidia continue its climb toward the top of the table? We have the answers you need to make informed decisions if you’re considering betting on their stock value at top-rated betting sites.
What Is Nvidia?
You may remember Nvidia Corporation as one of the leading manufacturers of graphics cards for computers. That was their main focus when they were founded in 1993 by the triumvirate of Jensen Huang (still their CEO), Chris Malachowsky and Curtis Priem.
Nvidia is still heavily into graphics processing units (GPUs) and related computer stuff, but the real push behind their soaring market cap is artificial intelligence. Thanks to AI, Nvidia is able to produce even stronger and faster GPU chips than before.
Chances are you’ve already been using these chips without even knowing it. If you’ve played around with ChatGPT, for example, you’ve experienced the power of the Nvidia H100 GPU, which has a stranglehold on the market for these “large language model” (LLM) networks. Now Nvidia has announced the H200 GPU, introduced last November and expected to begin shipping in the second quarter of 2024.
The H200 will reportedly have 1.4 times the memory bandwidth and 1.8 times the memory capacity of the H100. In other words, if you think AI is impressive/scary now, you ain’t seen nothin’ yet.
How Big Is Nvidia?
Massive, at least when it comes to market cap. Here are the world’s Top 4 publicly traded companies as we go to press:
- Microsoft $3.023 trillion
- Apple $2.788
- Saudi Aramco $2.059
- Nvidia $1.959
This doesn’t mean you’re going to see Nvidia warehouses instead of Amazon the next time you’re driving around town. Nvidia has an estimated 29,600 employees; it would need to double that amount just to crack the Top 500. Amazon (1.5 million employees) is second in this category behind only Walmart (2.1 million).
Nvidia also ranks a relatively modest No. 28 overall when it comes to earnings at $34.07 billion, or about one-fourth as much as Apple (No. 4 at $121.4 B). And their revenues (No. 171 at $60.92 B) are a drop in the bucket compared to oil-rich Saudi Aramco (No. 2 at $246.43 B).
How Big Will Nvidia Get?
Bigger than they are now.
While everyone waits for the H200 GPU to hit the shelves, Nvidia is cranking out as many H100s as it can; the Financial Times reported last August that Nvidia was planning to produce two million of these units in 2024, up from an estimated 500,000 last year. That’s a considerable haul on the horizon at $25,000 to $40,000 per unit.
All of this is happening while AI, especially generative AI, is still in its boom phase. Goldman Sachs said earlier this month that they expect “sustained growth” in this sector, as more and more companies – and sovereign states – enter the market.
It helps when your competition is also among your biggest consumers. Microsoft, Amazon and Alphabet all use the H100 for their cloud computing, as does Oracle, and they’ll be switching to the H200 once it’s ready.
Having said that, it’s not just Nvidia out there making GPUs and greenbacks. Advanced Micro Devices (AMD) has seen their stock price go up 18% in 2024, as they ramp up production of their own MI300 series. Super Micro Computer, Synopsys and Marvell Technology have also seen recent gains.
Still, it’s Nvidia that’s dominating the scene for now. And with that H200 chip on our doorstep, that arrow is probably going to stay pointed upwards for quite some time.
