- Enoch Oyedibu
- Nvidia
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The CEO mentioned that the computer industry is going through significant changes, particularly with the rise of artificial intelligence (AI). This statement sparked a huge increase in the company’s stock price.
On May 24, 2023 – Nvidia, a major technology company specializing in the manufacturing of chips, announced its financial results for the first quarter of 2024. The results were massive, leading to what catapulted the company to become the most valuable company in the world. The rank of being a valuable company in the world helps Nvidia to topple rivals Apple and Microsoft. And all thanks to Its market cap which hovered around $750 billion at the time.
Nvidia showed strong growth in revenue and net income. Its revenue was up by 19 per cent, and net income increased 26 per cent, leaving everything looking positive, but not extraordinarily so, a Statista analysis showed. It was the company’s second-quarter outlook predicting a 65 per cent jump in revenue as well as the words of CEO Jensen Huang that sparked one of the most remarkable stock market rallies in recent memory.
The CEO mentioned that the computer industry is going through significant changes, particularly with the rise of artificial intelligence (AI). This statement sparked a huge increase in the company’s stock price.
“The computer industry is going through two simultaneous transitions — accelerated computing and generative AI,” Huang said at the time. “A trillion dollars of installed global data centre infrastructure will transition from general-purpose to accelerated computing as companies race to apply generative AI into every product, service and business process.” What investors heard was that Nvidia was at the forefront of a trillion-dollar opportunity, which immediately sent the company’s share price to unprecedented highs. The next day, Nvidia added nearly $200 billion to its market capitalization and that was only the beginning.
In June 2023, the company reached a market capitalization of $1 trillion for the first time, on March 1, 2024, it closed above $2 trillion and a little more than three months later, it surpassed $3 trillion. Earlier this week, Nvidia passed the ultimate milestone, when its market cap, boosted by a recent stock split, surged past Microsoft and Apple to make the chipmaker the most valuable company in the world. While investors will certainly have enjoyed the ride up to this point, questions over whether Nvidia’s current valuation is justified and sustainable are naturally getting louder. While some are arguing that we’re still just at the beginning of the AI boom, others aren’t yet convinced that AI will deliver on the hype that tools like ChatGPT, which has seen drastic improvements, have created over the past two years.
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Enoch Oyedibu
I am a writer and investigative journalist who specialises in literary criticism and underrepresented narratives. Among other publications, I have been featured in Business Day Nigeria, TheICIR, Platform Times and Daily Nigerian. Right now, I work as a full-time staff writer for Unconventional Magazine.
