Why NVIDIA’s Stock is Soaring: The Boom in AI Market Explained

Why is NVIDIA’s stock soaring and the AI market booming?

Leading chipmaker company “NVIDIA” surpassed the biggest tech companies, Microsoft and Apple, in stock market value, reaching $3.34 trillion since June 18, 2024.

NVIDIA has played a major role in the development of modern computer graphics and is a dominant force in the gaming industry. Everyone is curious about the recent increase in market shares of NVIDIA’s AI boom.Let us discuss in detail:

Read about Top AI Trends for 2024.

Since its establishment in 1993, NVIDIA has focused on the development of graphics processing units (GPUs).

In 1999, NVIDIA launched the GeForce GPU, a graphics processing unit specifically designed for gaming. Fortunately, this launch coincided with the peak of the dot-com boom. The success of the GeForce propelled NVIDIA into the spotlight of the gaming industry.

Despite not playing a direct role in the website boom, especially in the dot-com bubble, they indirectly benefited from it. These GPUs played a crucial role in enhancing the quality of computer graphics, a sector not directly associated with website ownership.

Since the 2000s, NVIDIA’s GPUs have been essential to the expansion and development of the gaming industry. The gaming industry has experienced tremendous growth in recent years, with projected revenue of almost $25 billion by 2025.

Their market dominance and technological innovations have affected gaming experiences as well as more general computing and entertainment trends, indicating the company’s continued influence on mass market technology.

NVIDIA’s AI technology has revolutionized the gaming industry, enabling features like AI-enhanced graphics and real time ray tracking.

The rise of Esports:The esports industry has gained popularity because professional gamers are competing in high-stakes tournaments.NVIDIA’s GPUs and AI technology provide them high quality graphics and enhance their gaming experience.

Cryptocurrency mining has been a significant driver of NVIDIA’s market share growth since 2010. However, the period around 2017 was a wild ride. Soaring cryptocurrency prices and a surge in investor interest created market chaos like situation .Yet, Nvidia was one company well-positioned to benefit from this sudden surge in supply and demand.

GPU demand and Cryptocurrency Mining: Cryptocurrency mining basically requires power computing hardware to solve complex mathematical equations.NVIDIA’s GPUs, due to their large processing power, became the most demanding tools for miners.

The high demand for GPUs from miners has created shortages of graphics cards for gamers and other consumers, disrupting the supply chain and driving up prices. This surge in demand has undoubtedly contributed to Nvidia’s increased market share.

Miners also use Nvidia’s cards to mine tokens, a process that requires significant electricity consumption. With the rise of cryptocurrencies, Nvidia’s cards saw unprecedented growth in recent years, especially during the COVID period.

NVIDIA’s earning’s reports showed a massive surge in stocks as AI gained momentum throughout 2023.

AI platforms such as ChatGPT, Gemini have use Nvidia advanced chips to train complex generative AI programs.

NVIDIA’s GPU and software have become the foundation for AI research and development, driving breakthroughs in:

• Computer vision
• Autonomous Vehicles
• Deep learning

For the fiscal fourth quarter that ended on January 28, 2024, Nvidia recorded sales of $22.1 billion. This revenue increased by 265% from the previous year and by 22% from the third quarter. The company’s sales for the entire year increased by 126% to $60.9 billion.

Companies require technology to handle the AI wave’s high energy requirements, but these sophisticated chips are also required for gaming, spatial computing, and the metaverse. Nvidia continues to develop CPUs for automobiles as technology progresses.

The surge in NVIDIA’s ‘stock will continue in the future because its processors still run most of the data centers that power generative AI.Generative AI will continue to grow in the future due to its high demand. Only the USA and China trade war and strict rules and regulations for each other effect the market value of NVIDIA.