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  • Writer's pictureTharindu Ameresekere

Nvidia's Meteoric Rise: The New Tech Titan

Updated: Jun 20

Source: The Brand Hopper

Chip-maker Nvidia has become the world’s most valuable company, when it reached a market capitalization of $3.34 trillion after its share price hit an all-time high on Tuesday. The stock ended the trading day up 3.5%, surpassing tech giants Microsoft and Apple. Nvidia's rapid growth is attributed to its dominance in the AI chip market which is an area of technology that is being heavily developed.

The Californian company's meteoric rise has been fueled by its leadership in producing chips essential for artificial intelligence (AI). Speaking at an event in Copenhagen, Chris Penrose, global head of business development for telco at Nvidia, predicted further growth in the sector. “The generative AI journey is really transforming businesses and telcos around the world," he said. “We’re just at the beginning.”

Analysts at Wedbush Securities foresee a race to a $4 trillion market cap in tech, involving Nvidia, Apple, and Microsoft. They noted, "We believe over the next year the race to $4 trillion market cap in tech will be front and center between Nvidia, Apple, and Microsoft."

Other commentators, however, have expressed caution regarding Nvidia's future growth. With increasing competition, some analysts question whether Nvidia can maintain its large market share. Sandeep Gupta, a Barclays credit analyst, has raised concerns about how Nvidia’s customers will monetize AI software. Nonetheless, Nvidia's growth trajectory remains impressive and largely unprecedented and further growth is expected. Quilter Cheviot technology analyst Ben Barringer stated that the company had "once again cleared a very high hurdle." He added, "Demand is showing no signs of switching off either."

Just eight years ago, Nvidia's stock was worth less than 1% of its current price. Initially, its value was driven by competition with AMD in the graphics card market. In recent years, Nvidia has benefited from a surge in demand for AI chips, most notably for models like OpenAI's ChatGPT. The company also saw significant sales increases during the 2020 Bitcoin mining boom.

Source: CNN

The rise of Nvidia has also elevated the profile of its CEO, Jensen Huang. He is a notable person in the industry known for his signature leather jacket. Meta boss Mark Zuckerberg even called Huang the "Taylor Swift of tech" for his growing public persona.

While Nvidia’s future looks bright, the company faces challenges in maintaining its market dominance amid rising competition. However, its continued innovation and market leadership in AI technology position it well for ongoing success.

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