The trillion-dollar club: Thanks to ChatGPT, a “new giant” surpassed even Elon Musk’s Tesla, sharing the same tray with many technology “big guys”

Nvidia joins trillion-dollar club

Chipmaker Nvidia is now worth roughly as much as Amazon.

America’s largest semiconductor company has surpassed the $1 trillion market cap mark. Before that, only a handful of companies including Apple, Amazon and Microsoft had achieved it.

Most of the names that have surpassed the $1 trillion market cap are familiar names, with Nvidia being the new name that has been getting more attention recently in the context of the AI ​​boom.

The graphic below compares Nvidia with 7 companies that have been and are in the trillion-dollar club.

Benefit from the wave of artificial intelligence (AI)

Nvidia’s market capitalization has more than doubled by 2023 to over $1 trillion.

Nvidia is a big beneficiary of the rise of generative AI, a technology that is expected to reshape every industry, drive massive productivity gains, and possibly cause millions of jobs to disappear. And the technological leap of generative AI will be greatly accelerated by the H100, which has suddenly become the hottest item in Silicon Valley today.

H100 chips are increasingly popular among Big Tech like Microsoft and Amazon (who are building data centers entirely focused on AI) and startups specializing in generative AI (such as OpenAI, Anthropic, etc.) Stability Ai and Infection AI). Because this chip has very high performance, it helps to shorten the cost of AI training or speed up product development and launch.

It was the explosion of ChatGPT that helped Nvidia reach this desirable milestone. However, as Nvidia’s market capitalization reaches new heights, many wonder if the company’s explosive growth will continue or if the AI ​​craze is temporary. There are cases where it is done on both sides.

Nvidia’s growth: Will it continue?

Big tech companies are racing to develop capabilities like OpenAI. These types of AI require a lot more computing power. Many tech giants, including Google and Microsoft, use Nvidia chips to power their AI operations.

To some, Nvidia’s valuation seems unrealistic even with the prospect of AI still wide open. Even though Nvidia has expected revenue of $11 billion next quarter, that’s still significantly higher than other major tech companies. This shows that the company is overvalued at current prices.

Reportedly, this is not the first time Nvidia’s market capitalization has skyrocketed. In 2021, the company’s stock price skyrocketed more than 100% as demand for crypto mining GPUs increased.

These specialized chips help with cryptocurrency mining, and the skyrocketing demand led to a shortage of chips at the time. As the cryptocurrency lost its luster, Nvidia’s stock price fell more than 46% the following year.