GPU manufacturer Nvidia has become a $1 trillion company due to a recent surge in valuation fueled by the AI battle amongst behemoth tech companies to bring generative AI tools to their products.
During the recent Google I/O event as well as the Microsoft Build presentations, both companies made AI the centre of their product offerings. Nvidia on the other hand, has created its chips as a key supplier for companies looking to work with AI tools.
Nvidia’s valuation soared past the trillion-dollar benchmark with share prices slightly above $405 per share, an achievement that has placed the chip maker in an exclusive league previously occupied by a handful of companies including Apple and Microsoft after they both crossed the significant threshold in August 2018 and August 2019, respectively.
The trillion-dollar club
Both Amazon and Google also belong to this elite group of tech stocks. Although Meta is no longer part of the trillion-dollar club, the company’s metaverse ambitions as well as AI advancements could see it make its way back to being amongst the trillion-dollar elites.
At the end of Monday’s trading session, the share price of Nvidia fell to $401.11, having previously reached a peak of about $419. Consequently, the company’s stock is currently valued at around $992 billion, which temporarily excludes it from the esteemed $1 trillion club.
Prioritising video games and AI
According to Nvidia’s most recent quarterly earnings report, the company recorded a profit of more than $2 billion within three months. This surge in profitability follows Nvidia’s successful performance during the initial phase of the pandemic when their business thrived amidst a shortage of GPUs.
The demand for PC gaming and cryptocurrency mining contributed to their success before those markets experienced a decline throughout 2022.
CEO Jensen Huang acknowledged last autumn that Nvidia had produced an excessive number of gaming GPUs, which led to the company selling them at discounted prices. However, when Nvidia’s next report arrived in February, the situation appeared more optimistic.
Nvidia has been working closely with Microsoft company to integrate powerful AI capabilities into the Windows operating system by leveraging the innovative RTX technology.
Isa Muhammad is a writer and video game journalist covering many aspects of entertainment media including the film industry. He's steadily writing his way to the sharp end of journalism and enjoys staying informed. If he's not reading, playing video games or catching up on his favourite TV series, then he's probably writing about them.
