Crossing the threshold of trillion dollar market capitalization

Crossing the trillion dollar market cap, Nvidia $ Nvidia (NVDA)$ broke through.

On May 25, Nvidia released its Q1 FY2024 earnings report, which showed that Q1 Nvidia achieved revenue of $7.19 billion, down 13% year-over-year and up 19% sequentially, better than the market's estimate of $6.5 billion. Adjusted earnings per share were $1.09, better than the market's expectation of $0.92.

After the earnings release, Nvidia quickly pulled up after hours, opening the next day with a 24.37% jump, after which, Nvidia rose all the way to break through the trillion dollar market cap.

As a chip company whose market capitalization exceeded the trillion dollar mark. Nvidia's market capitalization soared the day before, equivalent to one AMD, two Intel, three Micron ......

Nvidia was able to successfully break the trillion dollar market cap mark, on the one hand, as a result of market synergy, and it became the seventh company to break the trillion dollar market cap after Apple, Microsoft, Amazon, Meta, Google, and Tesla.

Nvidia's big rise is the result of the times making. It is also a reflection of the richness of AI application scenarios following the popularity of ChatGPT. the reason for Nvidia's "epic" surge is the change in market expectations for its future.

According to forecasts, Nvidia's revenue for its fiscal second quarter is expected to reach around $11 billion, 53% higher than the $7.18 billion expected by the market.

During Nvidia's earnings call, Nvidia CEO Jen-Hsun Huang said bluntly that the "iPhone moment" for artificial intelligence has arrived.

At Nvidia's 2023 GTC conference, Nvidia even struck a "Don't miss the defining moment of AI!" The slogan! This proves that the decisive moment for AI has arrived.

As the key to AI arithmetic, Nvidia has become the biggest beneficiary of GPU arithmetic technology at hand, and it is clear that Nvidia has won the hemp.

Naughty boy" Hwang In-hoon

A leather jacket and a pair of jeans seem to be the inherent impression that Jen-Hsun Huang gives to the outside world.

This impression is even somewhat stereotypical.

Jen-Hsun Huang was born in the 1960s to a relatively wealthy family in Taiwan, China, where his father was a chemical engineer and his mother was an elementary school teacher. When he was nine years old, his family decided to immigrate to the United States.

As a teenager, Jen-Hsun Huang was not a "good boy" in the secular sense, but rather a good smoker and fighter, but this did not stop him from growing up.

In 1984, he earned a degree in electrical engineering from Oregon State University, followed by a master's degree from Stanford University.

As a standard academic, he has been working in the chip industry since graduation, working for AMD as well as LSI Logic. Those who are familiar with Jen-Hsun Huang know that he is a famous workaholic. Whenever he was asked why, he always explained that it was for the sake of our children and to make their future a little brighter.

In late 1992, Jen-Hsun Huang's opportunity crept up on him. He was approached by two of his friends, Chris and Prem, who wanted to invite him to join the company they founded, NVIDIA, and wanted him to become president and CEO.

I was successful before founding Nvidia, but at Nvidia I experienced failures, huge failures, all of them shameful and embarrassing," he said at the May 27, 2023 commencement ceremony at Taiwan University in China. Many of them almost brought us to our demise".

And so, at the invitation of a friend, Jen-Hsun Huang joined Nvidia.

In 1995, according to incomplete statistics, there were close to 90 graphics gas pedal card companies throughout the United States, and competition was nearing fever pitch.

An analyst named Jon later recalled, "Jen-Hsun Huang called specifically to ask about the graphics chip market and future trends, and I told him that the market hadn't even started and was already a mess, and there were already almost 30 companies, so you better not do this."

Since Jen-Hsun Huang's first venture was in the field of square imaging technology, a cold sector that was not well received by the outside world, their NV1 product was not successful and cost NVIDIA the first investment they raised.

This was Jen-Hsun Huang's first "failure story", and he had to persuade non-core employees to leave, promising to hire them back in the future when the company's situation improved. The size of the company was also cut by seven tenths of a percent.

In the end, Sega's $7 million deposit saved Nvidia and helped them survive until the Win95 era.

AI's "iPhone moment"

After the advent of the Win95 era, Jen-Hsun Huang decisively supported the Microsoft interface and proposed and Moore's Law, also known as the "Huang's Law" in the field of graphics chips.

At the end of 1999, Jen-Hsun Huang launched a new architecture of display chips, taking the lead in bringing the display chip industry into the GPU era.

In 2022, the windfall of new energy has gradually fallen, and globally, business and innovation need a new mainstream direction, the "emergence" of OpenAI broke the inherent quiet, and the windfall of new energy switched to the AI field.

For the switch in innovation, Casey Wood predicts that with the end of the rate hike cycle, new breakthroughs will come in the field of technology and innovation.

At the beginning of 2023, OpenAI's products made Microsoft the star of the market for a while. Behind the AI fire was the geometric growth of the demand for computing power. And this also pushed NVIDIA's GPU chips from purely for the game and visualization market to a higher and broader application dimension, and dramatically accelerated NVIDIA's overall business growth.

With the surge in demand for generative AI and big model applications, R&D, Nvidia has almost cornered the AI accelerated computing market today. This is the fundamental reason why Nvidia is favored by the market.

Some analysts point out that the opportunity in AI could be worth about $800 billion over the next decade, and that value will increase significantly as adoption increases.

Goldman Sachs analyst Toshiya Hari also believes that the turning point in the development of generative artificial intelligence "has arrived".

NVIDIA expects its revenue to reach about $11 billion in the second fiscal quarter.

JPMorgan analyst Harlan Sur pointed out that the earnings guidance indicates that the demand for generative artificial intelligence will be the first "massive wave".

At Nvidia's 2023 GTC conference, Jen-Hsun Huang mentioned AI's "iPhone moment" more than once, and it's clear that as AI application scenarios become more widespread, AI's "defining" moment has arrived.

The threshold of trillion market value, Nvidia has done. The future has come, has begun to catch on.

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