Chip manufacturing company NVIDIA, best known for it’s graphics chipsets, is in the news at the moment. The company's stock is making waves and seeing this stormy rise, the trading desk of America's leading financial services company Goldman Sachs declared it the most important stock in the world. Chip Manufacturer Nvidia recently overtook Google in terms of market capitalization. Apart from this, the US Stock Market is also showing enthusiasm due to the rise in the shares of the company.
The reason behind this is that Nvidia has been the primary beneficiary of the recent technology industry obsession with large artificial intelligence models developed on the company’s pricey graphics processors for servers. Graphics cards for gaming used to be Nvidia’s primary business before its AI chips started taking off, and some of Nvidia’s graphics cards can be used for AI. The company’s gaming business, which includes graphics cards for laptops and PCs, was merely up 56% year over year to $2.87 billion.
Nvidia’s smaller businesses did not show the same meteoric growth. Its automotive business declined 4% to $281 million in sales, and its OEM and other business, which includes crypto chips, rose 7% to $90 million. Nvidia’s business making graphics hardware for professional applications rose 105% to $463 million.
According to Bloomberg, while the AI chip manufacturer achieved tremendous growth last year, NVIDIA is solely responsible for one-third of the growth of the Nasdaq 100 index in 2024 so far. This month, the company achieved another milestone as it overtook Google's parent company Alphabet Inc. and Jeff Bezos-led giant e-commerce company Amazon in terms of market cap. It became the fifth most valuable company in the world and the third most valuable company of the US. The market capitalization of the company had increased to the level of 1.78 trillion dollars.
If we look at the performance of the company's shares, its growth can be gauged from the fact that in the past year, the price of this company's shares (NVIDIA Share) has increased by more than 225%. Not only this, according to Bloomberg, the company's market cap has increased by $650 billion so far this year, which is more than the total market cap of Tesla, the company of the world's richest man, Elon Musk. The market cap of electric car manufacturer Tesla is $586.06 billion.
Due to Nvidia, there has been a boom in the American markets. The reason behind the high market enthusiasm is believed to be NVIDIA Q4 results, which indicated a surge in profits. In the fourth quarter, Nvidia recorded a revenue of $22.1 billion and EPS (Earnings Per Share) of $ 5.16, which are better than the predictions made about it. It is pertinent to note that analysts had estimated Nvidia's revenue to be $20.55 billion and EPS to be $ 4.64. After these results, Dow Jones (Stock Market USA) closed with a gain of 0.13 percent and S&P 500 index with a gain of 0.12 percent.
Jensen Huang of Taiwan founded NVIDIA in 1993 and the company started by making video game graphics chips. After this, as the use of chips increased, the company also started growing at rocket speed. Due to the increase in its market, the net worth of the company's founder also increased. According to the Bloomberg Billionaires Index, Jensen Huang is ranked 23rd in the list of the world's richest businessmen with a net worth of $59.6 billion.