For over a decade, Apple has held the title of the most valuable company in the world, reaching a market capitalization of over $3 trillion, largely due to the success of the iPhone. However, Apple was recently surpassed by Microsoft, and now a Bay Area company, Nvidia, has taken the lead as the new king of Wall Street with a market capitalization exceeding $3.2 trillion. Nvidia is known for producing semiconductors that are in high demand for artificial intelligence applications, particularly its H100 accelerator chip that can handle massive amounts of data.
Initially known for making premium graphics cards for gamers, Nvidia’s luck improved during the cryptocurrency boom when its powerful chips became popular among Bitcoin miners. The company saw a resurgence during the pandemic as demand for its products increased due to remote work and gaming. Nvidia’s stock has seen continuous growth since 2021, supported by the rising enthusiasm for artificial intelligence.
As the demand for AI continues to grow, companies like Microsoft, with its partnership with OpenAI, and Apple, with its integration of an Apple Intelligence Platform, are also seeing stock gains. However, some experts warn that Nvidia’s current stock performance may be unsustainable, cautioning that the high price may not reflect the company’s true value. Despite this, Nvidia’s revenue is projected to continue growing as demand for its chips extends beyond cloud service providers to various industries.
Overall, artificial intelligence is seen as having more practical applications compared to cryptocurrencies, with companies investing heavily in AI development. While Nvidia remains a dominant player in the market, competitors like Advanced Micro Devices and Intel Corp. are also launching new chips to compete with Nvidia’s market dominance. The stock market is closely watching the performance of Nvidia and other AI-focused companies, with differing opinions on the sustainability of their current stock prices.
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https://www.latimes.com/business/story/2024-06-20/how-ai-chip-maker-nvidia-became-the-worlds-most-valuable-company-chat-gpt-google-apple