The shares of the technology company Nvidia skyrocketed 16% and the company reached a market value of almost 2 billion dollars. This Thursday alone its capitalization increased by approximately 280 billion dollars. The event helped him find himself on the podium of the most valuable companies in the worldsurpassed only by Microsoft (US$ 3.06 billion e Manzana ($2.8 billion).
Nvidia jumped to the forefront of Wall Street in 2023 as artificial intelligence boomed. But the company was already growing by leaps and bounds because it produces key inputs to the multi-million dollar cryptocurrency players and miners market
Until its balance sheet appeared with much higher profits than expected – Tuesday evening – all of Wall Street was in suspense. A bad balance sheet for Nvidia could cause a sharp decline. But this did not happen. Rather the exact opposite. This Thursday the Nasdaq rose more than 3%. And the Dow Jones once again set a new record. But what is hidden behind this phenomenon?
Nicolas Merener, professor at the business school of the University of Ditella and specialist in capital markets surbayó that for some time there has been a revolution in the field of artificial intelligence and the production of the hardware that accompanies this dynamic, which are the GPUs or graphics processing units in which they are located Nvidia is a leader.
The tech company, which has taken a hit these days, competes with Intel, AMD and the Chinese giant Huawei. However, it is Nvidia that has an 80% market share. “It could be said from this perspective that it is a monopoly”- says Merener. The company, present on the market for more than 30 years, It has multiplied its value exponentially in the last 5 years. In the last two years its value has even tripled.
The specialist highlighted the value of this company, being one of the technology companies with a high market capitalization and added: “To get an idea of what Nvidia’s capital means, it is 21 times the Mercado Libre, which today is worth 91 billion dollars”.
In reference to the euphoria shown by the markets, this is due to the fact that The quarterly report showed very positive values and this raises investors’ profit expectations. And he underlines that there is no particular reason, but a consideration must be made in this regard sustainability of this growth. Like everything, growth is not infinite and in fact there are doubts about the excess demand for these goods. Merener states that this is not a problem because the adjustment would be based on prices, but instead attention should be paid to competition taking into account that Nvidia has lost access to the Chinese market.
Some financial data to keep in mind
The phenomenon, beyond the leap that the stock made yesterday and the increase in its assets, is not recent, since the company has been showing sharply increasing profits for some time, according to historical estimates, the results of the earnings/shares ratio indicate an increase over the year.
The latest growth estimate for the quarter is 372.4% and 83.7% growth is expected for the next quarter. The projections, as reported by specialists, foresee a good performance for this technological giant; in fact, growth of 70.5% is expected at the end of this year.
The company was founded on April 5, 1993 by Jensen Huang (CEO as of 2022), a Taiwanese electrical engineer who previously served as director of CoreWare at LSI Logic and microprocessor designer at AMD; Chris Malachowsky, an engineer who worked at Sun Microsystems, and Curtis Priem, who was previously a senior engineer and graphics chip designer at IBM and Sun Microsystems.
Originally dedicated to the difficult world of video games, One of its first productions was the family game console, SEGA. This early development, along with others, were what positioned it on the market to have a massive reach whose production would be geared towards finding technological solutions for all audiences. To do this it had an initial capital of 40 thousand dollars, which was then increased thanks to the capital flows received from the venture capital funds of Sequoia Capital and others (20 million dollars).
After an extensive career in creation microprocessorsIn May 2020, top scientists at Nvidia developed an open-source ventilator to address shortages resulting from the global coronavirus pandemic.
On May 14, 2020, Nvidia officially announced its Ampere GPU microarchitecture and Nvidia A100 GPU accelerator. In July 2020, Nvidia was reportedly in talks with SoftBank to buy Arm, a UK-based chip designer, for $32 billion.
In October 2020Nvidia has announced its plan to build the most powerful computer in Cambridge, England. Called Cambridge-1, the computer will use artificial intelligence to support health research and is expected to be completed by the end of 2020, costing around £40 million. According to Jensen Huang, “The Cambridge-1 supercomputer will serve as an innovation hub for the UK and promote the innovative work carried out by domestic researchers in drug discovery and critical healthcare.” https://es.wikipedia.org/wiki/Nvidia.
It is currently a large manufacturer of hardware, GPU, with the rise of artificial intelligence NVIDIA has become an essential supplier for all technology companies such as Meta (Facebook), Tesla and others, a fact that positions it in the market as a leader, which According to the latest reports, he cannot find a roof.
Source: Clarin
