Nvidia’s stock has quintupled in just one year, surpassing Alphabet and Amazon in the rankings of the world’s largest market capitalizations. Behind such performance… artificial intelligence!
“It’s better to sell the picks and shovels than to search for the gold” – Everyone knows the famous story of the 19th-century Gold Rush, in search of the irresistible nugget. The prospectors came back empty-handed, making a fortune for the equipment sellers. For its part, Nvidia sells graphics cards, the equivalent of picks and shovels, but in the 21st century, and investors have understood this well. As a global leader in processors, Nvidia thus holds the key element in the development of artificial intelligence.
Nvidia is worth as much as all of Hong Kong
Nvidia’s stock went from 150 dollars in January 2023 to 740 dollars today (almost a fivefold increase) on Wall Street, reaching a 1.78 trillion dollar valuation. “It is now worth as much as the entire Chinese stock market as defined by the H-shares listed in Hong Kong,” pointed out Michael Hartnett, chief investment strategist at Bank of America.
Nvidia dominates the graphics card sector with 84% market share according to Jon Peddie Research results, and even more than 90% according to some. Ahead of Meta, it shares with Alphabet (Google) the rank of the fourth largest market capitalization in the world (Amazon sometimes joins them). The company is positioned just behind the Saudi Arabian Oil Company, which it surpasses by just 0.2 trillion dollars in valuation.
The new gold?
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Featured photo : ©DALL·E
