The Golden Age has come for Nvidia
High demand keeps Nvidia growing: Quarterly revenue doubled, stock market value tripled – artificial intelligence causes strong sales figures for special chips. Even if the competition Intel or AMD doesn’t sleep, Nvidia doesn’t see an end of the golden age yet.
Possibly the most profitable company in the AI business it the Nvidia. The company, based in Santa Clara, California, sells computer chips that chat bots like ChatGPT need. The numbers show that the future looks golden: Revenue doubled to $13.5 billion and profits increased nearly tenfold from $656 million to $6.2 billion. And we are talking about figures that only include the past 3 months compared to last year!
A look at Nvidia’s share price shows that trading was very popular. Since the beginning of the year, the value has more than quadrupled.
What’s the situation in the artificial intelligence market?
Everything changed when ChatGPT was launched last year and gained worldwide attention. Now there’s a “gold rush” mood among the many companies like Google, Microsoft, Amazon and Co. They are all investing billions of dollars in artificial intelligence (AI), hoping that these big investments will pay out even bigger profits later. Only Nvidia can already earn a lot of money now. As the saying goes: In the great search for gold, shovels and pickaxes should be sold. In the case of Nvidia, these are the computer chips that are needed for AI.
What does Nvidia itself comment on the current situation? They report that there is a change in marketing which has only just begun. It is true that computer centers around the world are upgrading to computer chips with artificial intelligence. It should be noted that in such facilities hundreds of computers are connected and interact with each other. Large tech companies such as Meta, Microsoft or Google use them for their cloud services, for example. They can use them to run their own AI chat bots or provide computing power to other companies. For Nvidia, this is one of the biggest keys to success.
Also, a recent post from Nvidia confirms that the graphics manufacturer is intent on supplying AI specialty chips to companies.
The trade war between the USA and China: What’s next?
Nvidia generated around a quarter of its sales in the Chinese market. This means that the company falls under the trade restrictions of the USA. U.S. companies like Nvidia aren’t allowed to sell advanced, latest-generation chips to China. Despite these circumstances, success will continue for Nvidia: The California-based company expects to increase sales by the end of October. In fact, it expects a significant increase to 16 billion dollars. According to experts, the company anticipates a market share of 80 percent compared to competitors like AMD or Intel.
Comparison with the competition
The competition never sleeps. Nevertheless, Nvidia is clearly better off when it comes to producing the latest chips. The company is also in the same league on the stock market as Google (Alphabet), Apple, Microsoft and Amazon. Of course, the big tech companies are trying to develop and produce the AI computer chips themselves. However, they are not yet on the same level technically. That’s why these companies have to buy from Nvidia. As you would expect, this is very expensive, as the latest generation chip costs around $40,000. Nevertheless, Nvidia manages to sell thousands of them.
Let’s look at the Microsoft example: the new chat bot in the Bing search engine needs over 150,000 of these highly specialized AI computer chips. Consequently, the cost: four billion dollars. Shocked? With Google, it will be significantly more because of the many search requests! So it is obvious that Nvidia is the clear winner at the moment.
Note: It is important to note that this content is not intended to provide recommendations for investments. The Nullfocus Media Team adheres to factual information and advice. No liability is therefore accepted for losses.
