In the stock market Olympus thanks to AI

Nvidia now more valuable than Microsoft and Apple

(Bild: APA/AFP/GETTY IMAGES/JUSTIN SULLIVAN)

The AI boom has made the chip company Nvidia the most valuable company on the stock market. On Tuesday, Nvidia reached a stock market value of a good 3.33 trillion dollars (approx. 3.1 trillion euros), overtaking software giant Microsoft.

With its march to the top, the Nvidia share is the best performing stock in the past 25 years, as calculated by the financial service Bloomberg. According to Bloomberg figures, the value of the share, including reinvested dividends, has risen by an incredible 591,078 percent since the IPO in 1999.

Recently, it has become clear time and again that the demand for artificial intelligence software is driving explosive growth in Nvidia's business. In the past quarter alone, there was a 262% year-on-year jump in turnover to 26 billion dollars. At the same time, the quarterly profit shot up from two to almost 15 billion dollars.

Just the beginning
And 61-year-old company boss Jensen Huang, Nvidia co-founder and charismatic showman, promises that this is just the beginning of a computer revolution. Huang is convinced that in the future, most content will no longer be retrieved prefabricated from memories, but that AI software will generate it freshly based on the current situation. For example, it will be possible to talk to building technology via a chatbot instead of viewing data somewhere.

Nvidia is preparing for this future with a new generation of chips called Blackwell. With the current Grace Hopper system, for example, the chatbot ChatGPT could have been trained within three months with 8000 Nvidia chips and a power consumption of 15 megawatts, said Huang. Blackwell could do this with 2000 chips and four megawatts of electricity.

Jensen Huang

(Bild: APA/AFP/Sam Yeh)

Cooperation with HP
If Huang is right with his vision of the future, this would mean even more business for Nvidia. And investors' belief in this is one of the drivers behind the recent surge in the share price. The stock is currently worth around ten times more than it was in September 2022. Huang himself rose to twelfth place in the Bloomberg ranking of the richest people in the world with an estimated fortune of 115 billion dollars.

The 3.5 percent jump in Nvidia's share price on Tuesday was preceded by the announcement of a cooperation with the computer group Hewlett Packard Enterprise for technology for the use of AI in companies. In after-hours trading, Nvidia shares rose by a further 0.6 percent.

Demand exceeds demand
The Silicon Valley website "The Information" also reported on Tuesday that Huang is now concerned that major customers such as AWS and Microsoft are buying more Nvidia chip systems than they can currently fit in their data centers. In order to avoid a later oversupply on the market, buyers would now have to prove that they have sufficient capacity.

After a slight fall in its share price, Microsoft's market capitalization on Tuesday was 3.317 trillion dollars, while Apple's was 3.286 trillion dollars.