Five charts that show Nvidia’s astonishing rise to chip stardom

All the illusion and expectation of the transformative potential of artificial intelligence (AI) seems to be contained in six letters: Nvidia. The chip manufacturer has defied all Wall Street analysts’ forecasts quarter after quarter, experiencing meteoric stock market growth in the last two years and already rubbing shoulders with the most valuable companies in the world. The potential of Nvidia’s technology to train artificial intelligence has propelled the company into the big tech club.

But the very strong rise is not supported by simple expectations; On the contrary, investors celebrate the record results and forecasts published two weeks ago by the company, which caused the capitalization to grow by 170 billion euros in a single day, more than the total value of General Electric. Nothing can be taken for granted when Nvidia is involved. Five graphs explain the brand’s assault on the global stock market podium.

Whoever had invested 1,000 euros in Nvidia when it went public in January 1999 would now own nearly four million euros. The firm’s stock has one of the strongest returns on record, according to Bloomberg analysts. In the last two years alone, the stock market has grown by 550%, driven, in the first instance, by the demand for graphics cards (GPU) that serve as the basis for the complex systems that train artificial intelligence. The price began to increase strongly after OpenAI announced that it had used thousands of the manufacturer’s cards to train the bot of artificial intelligence, ChatGPT. These cards, used by gamers (video game players) both amateur and professional, are designed to support a lot of parallel workload, unlike standard processors, prepared to concentrate on one task. This makes them ideal for AI.

Thus, based on the popular and coveted GeForce RT cards, Nvidia has also announced special processors, the H200, designed to train large language models. “The team has been working diligently with its supply chain partners to prepare for this next large increase in volume,” they warn from JP Morgan. This year alone, Meta announced that it intends to purchase more than 350,000 units of its predecessor, the H100.

The dizzying increase in chips to train AI has triggered the commitment to the brand, which has reached a stock market capitalization of 2.81 million dollars, not far from Apple and Microsoft, which are worth 2.9 and 3.08 billion. , respectively. In 2024 alone, the stock has more than doubled, adding about $1.1 trillion in market capitalization. He rally of the company from Santa Clara (California) has added more than Alphabet, Microsoft and Amazon combined. “It is unlike anything we have seen in technology since the beginning of the Internet in 1995,” they proclaim from the analysis firm Wedbush Securities.

The income of the company based in Santa Clara (California) has tripled in 12 months to reach 26,044 million dollars (about 24,008 million euros at the current exchange rate) during the first fiscal quarter that ends in April. Other graphics card manufacturers, such as AMD, reaped about 6,168 million euros in the last quarter, according to their latest results.

Data centers have become the centerpiece of the business. This division accounts for 87% of the company’s turnover compared to 60% in the first quarter of last year. “The next industrial revolution has begun, companies and countries are partnering with Nvidia to change traditional data centers for accelerated computing and build a new type of data centers, AI factories, to produce a new raw material: intelligence. artificial,” said Jenhsun Huang, CEO and founder of the brand.

A week ago, Nvidia reported that in the first quarter of the current year, profits had multiplied by more than seven, going from 2,043 million euros in the previous year to 14,881 million in this year, a jump of 628% and a new record mark. Only Alphabhet, Apple and Microsoft generated higher profits in the last half year.

The company with the green logo keeps analysts busy, who have had to revise upward growth forecasts more than once. Two weeks ago, the chip maker reported that its revenue would be 53% higher than what experts expected. Wells Fargo analysts, who had forecast full-year earnings per share of 4.10 euros, ended up predicting 7.12 euros.

The reaction had its immediate effects on the entity’s price. The shares rose 24% on Thursday, May 23, adding nearly €170 billion to the company’s capitalization. This movement in Nasdaq values ​​was one of the largest jumps in market capitalization in history and represented an increase in value almost greater than what companies such as the Walt Disney group or General Electric are worth, or the sum of the amount on the stock market of Santander, BBVA and CaixaBank together.

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