With a 16.4% increase on Thursday following a quarterly earnings release that was above analysts’ projections, chipmaker Nvidia Corp. eclipsed all other companies in the world to become the fourth biggest by market capitalization.
This year, the company’s market capitalization has increased by the greatest amount globally, totaling $740.2 billion.
With this move, Nvidia is now the third-largest firm in the US, behind only Apple Inc. and Microsoft Corp. and ahead of internet behemoths Amazon.com Inc. and Alphabet Inc.
It is the fourth-largest in the world, after only Saudi Aramco.
The market capitalization of the corporation as of Thursday was $1.96 trillion, down from $1.52 trillion at the end of January.
The success of the S&P 500 has been greatly influenced by the 58.5% increase in Nvidia shares in 2024, which accounted for more than 25% of the index’s gain this year. Analysts are keeping an eye on whether the chipmaker can generate more profits.
Thursday marked a record high for the S&P 500 index, which has increased 6.65% this year after surging 24% in 2023, mostly due to a strong gain in the technology sector.
According to Brian Colello, a strategist at Morningstar, “leading cloud computing companies plan to boost their capital expenditures to satisfy demand for artificial intelligence training and inference, and it appears that virtually all of this spending will fall into Nvidia’s pockets.“
“As more chip supply comes online, we anticipate that Nvidia’s revenue will rise by a couple of billions each quarter throughout fiscal 2025.“
The American semiconductor company NVIDIA Corporation (NVDA) is a top producer of high-end graphics processing units (GPUs) worldwide.
GPUs are designed to accelerate graphics-intensive activities like video games, editing, and 3D rendering in addition to artificial intelligence (AI) and machine learning (ML) applications, in contrast to general-purpose central processing unit (CPU) semiconductor chips. For more than 25 years, NVIDIA has been at the forefront of GPU technology and was one of its early adopters.
NVIDIA positioned itself as a major supplier of AI hardware and software after becoming one of the top chip manufacturers in the world with a focus on GPU technology. When the public was able to use OpenAI’s ChatGPT generative AI chatbot in 2022, it experienced a breakthrough in the sector. With the use of a supercomputer driven by 10,000 NVIDIA GPUs, OpenAI developed its technique.
NVIDIA’s competitive advantages and market distinction were largely attributed to its concentration on GPU technology rather than the dominant CPU technology.
GPU technology excels in parallel processing, using additional cores to allow numerous processes to run simultaneously, whether by design or natural capacity and improvement. CPUs, on the other hand, use serial processing, which often necessitates finishing one task before starting another.
