Nvidia, known for its computer chips utilized in artificial intelligence software, became the world’s most valuable company after its share price reached an all-time high on Tuesday. The stock closed the trading day at nearly $136, experiencing a 3.5% increase, surpassing Microsoft in value. Earlier this month, Nvidia had surpassed Apple in value as well.
The demand for Nvidia’s products has been steadily increasing over the years, resulting in a boost in sales and profits for the company. Many investors believe that Nvidia’s profits will continue to grow, leading to a surge in its share price. However, some have raised concerns about the company’s high valuation.
With a market value of $3.34 billion, Nvidia’s stock price has nearly doubled since the beginning of the year. Just eight years ago, the stock was worth less than 1% of its current price. The competition among AI developers in the tech industry, including Microsoft, Google, Meta, and Apple, continues to intensify. Despite this, Nvidia remains dominant in the majority of the AI chip market, leading investors to believe in the company’s potential for further growth.
Nvidia’s sales and earnings have consistently exceeded analysts’ expectations in recent years. Following the release of its latest financial results in May, Quilter Cheviot technology analyst Ben Barringer commented on the company’s ability to surpass high hurdles and highlighted the continuous demand for its products. However, there are minority opinions that express caution about Nvidia’s future prospects.
In February, Barclays credit analyst Sandeep Gupta raised concerns about Nvidia’s ability to maintain its large market share amidst a growing number of competitors. Additionally, Gupta questioned how Nvidia’s customers would be able to monetize AI software in the long run. Despite these uncertainties, many investors remain optimistic about Nvidia’s potential for further growth and success in the AI industry.
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