When the three founders of Nvidia founded the company in 1993, they didn’t know what to name it and started calling it NV, short for next version, or next version. For this reason, when looking for the definitive name, they looked for words that began with the letters nv. Finally, from the Latin envy (envy) deleted the first letter. The company is now the envy of the tech industry. It is one of the winners of the fever for artificial intelligence. She has skyrocketed in the stock market and is knocking on the door of the billion dollar club.
At the same time, it has boosted the prices of other firms in the sector. This Friday, the star was Marvell Technology, another Silicon Valley semiconductor manufacturer, which has shot up 32.4% after announcing that it expects to double its revenue next year from artificial intelligence. The company is already worth more than $56 billion. Qualcomm (+6.1%), Micron Technology (+6.2%), Intel (+5.8%), AMD (+5.5%) are among those who have caught the euphoria, which has crossed also the Pacific and boosted South Korean and Taiwanese firms such as SK Hynix (+5.5%), Mediatek (+3.1%) and TMSC (+4.2%).
Nvidia presented on Wednesday some good results for the first quarter, but above all, some surprising forecasts for the second. “In the 15+ years we’ve been doing this work, we’ve never seen guidance like the one Nvidia just released with a Q2 outlook that was clearly cosmological and expectations-busting,” they wrote. Bernstein analysts in a report sent to clients.
Basically, the company said that expected revenue of about $11 billion (about 10,300 million euros) in the second quarter when what the market expected was less than 7,200. Artificial intelligence is the reason sales are skyrocketing. Amazon Web Services, Google Cloud, Microsoft Azure and Oracle are among the firms vying to lead the new technology, but all of them turn to Nvidia for their data centers and processors.
The data center business grew 14% to sales of $4.28 billion, fueled precisely by demand for its powerful processors from cloud service providers as well as large consumer Internet companies, which they use Nvidia chips to train and deploy generative artificial intelligence applications like OpenAI’s ChatGPT.
After publishing these forecasts, Nvidia’s shares shot up on the stock market by around 25% on Thursday and approached that trillion dollar bar. It is already the fifth most valuable private company in the world, only behind Apple, Microsoft, Alphabet and Amazon, four other big technology companies, although much better known to the general public. The increase in value in one day was 183.8 billion dollars, the third largest in the history of the Stock Market, only behind Amazon’s 191.3 billion on February 4, 2022 and Apple’s 190.9 billion revaluation on February 10. November 2022.
The high-power processors that Nvidia designs and manufactures have been added to different booming businesses. In its 30-year history, Nvidia has pioneered graphics processing for computers and video game consoles. To have ever better images, it has exponentially increased the power of its processors, with capabilities for robotics, cloud computing, aerospace, weapons manufacturing, the metaverse, cryptocurrencies, autonomous driving, reconnaissance of images and, of course, artificial intelligence.
The latter is perhaps the one that benefits you the most. “I wouldn’t go as far as to say that he has won the race, but right now he is winning it,” said Zeno Mercer, principal analyst at ROBO Global, in an opinion reported by Bloomberg.
Some analysts fear that a bubble like the one that affected technology stocks in the year 2000 could occur. The question is whether strong growth in demand for microprocessors is an extraordinary and exceptional phenomenon or something sustainable. Depending on the scenario, the assessments would be one or the other.
“The computing industry is going through two simultaneous transitions: accelerated computing and generative AI,” Jensen Huang, founder and chief executive officer of Nvidia, told analysts on Wednesday. “We are receiving incredible orders to retrofit data centers from around the world,” he added. A trillion dollars of installed global data center infrastructure will shift from general purpose to accelerated computing as companies rush to apply generative AI tools like ChatGPT across different products, services and business processes. “A data center budget will shift heavily toward accelerated computing,” he added.
Jensen Huang, 60, born in Taiwan and raised as a child in the United States, has degrees from Oregon State University and Stanford University. He founded the company with Chris Malachowsky and Curtis Priem, with a vision of bringing 3D graphics to the gaming and multimedia markets. He has run it ever since and has become the head of a large company with the longest track record in all of Silicon Valley. In 1999, Nvidia invented the GPU, the graphics processing unit, which set the stage for profound industry change.
With Nvidia’s appreciation on the stock market, Huang’s fortune has skyrocketed. According to the latest annual compensation report, he owns about 87 million shares of the company (3.5% of the capital), valued at about 34,000 million dollars. He is one of the 40 richest men in the world. His compensation package in his shares, and that of the rest of the company’s employees, is also going to skyrocket. According to its latest quarterly report, The company has incentive plans for 40 million shares, valued at current prices at more than $15 billion.
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