The king of Artificial intelligence.

Artificial intelligence chip giantsNvidiaThe stock price once soared to US $1,222.99, and the market value exceeded US $3,005.3 billion.AppleBecome second only toMicrosoftThe world's second largest company has opened a new chapter in the reshuffle of the market value of Wall Street giants. Microsoft has a market capitalization of $3.15 trillion.At the same time, as the co-founder and CEO of Nvidia, Huang Renxun's worth has also risen. His net worth topped $100 billion,Become one of the 16 "super rich" with assets exceeding US $100 billion on the "Forbes" Global Rich ListBut still trailing the likes of Bill Gates, Jeff Bezos, and Elon Musk.

Nvidia's second-quarter revenue forecast released on May 22 was higher than market consensus expectations, and it announced a stock split plan (1 for 10). A leader in artificial intelligence. Since then, Nvidia's stock price has risen nearly 20%, and it has risen as much as 150% this year. In 2023, Nvidia's stock price will lead the S&P 500 index with a 238.9% increase.

Among this year's "Tech Seven", Nvidia is undoubtedly the brightest performer, while Meta's stock is not far behind with a 35.6% gain. However,TeslaOf stocks have become a notable exception in terms of earnings and valuations, and are expected to fall 28.9% in 2024, leading the broader market lower.

Regarding Nvidia's market performance, Derren Nathan, head of equity analysis at Hargreaves Lansdown, said: "The market has been trying to keep up with Nvidia's improving growth trajectory. Although the current expected P/E is around 35 times, this It doesn't feel like bubble territory."

According to LSEG data, Nvidia's recent expected P/E is 36 times, compared with AMD andIntelThe expected P/E are 38 times and 21 times, respectively. Nvidia's stock price has more than doubled again so far this year after more than tripling last year, showing its strong market appeal and growth potential.

At the same time, Microsoft's stock price is also at an all-time high, with a relatively modest gain of about 12% so far in 2024. In contrast, Apple's performance is not very satisfactory. Despite a strong rebound in May, Apple shares have not risen or fallen by more than double digits so far this year.

Three Milestones of Nvidia's Market Value

The continuous leap in Nvidia's market value is remarkable. A year ago, the company's market capitalization was less than $1 trillion.GoogleParent company Alphabet,AmazonAfter giants such as, Apple and Microsoft. In the ranking of the "Big Seven of Technology", its market capitalization is only slightly higher than that of Meta and Tesla.

However, Nvidia's market value has grown rapidly. By the close of trading on June 13, 2023, its market value has successfully crossed the $1 trillion mark. And on February 23, 2024, it will break through 2 trillion US dollars strongly, becoming the company with the fastest market value to jump from 1 trillion US dollars to 2 trillion US dollars.

On May 22 this year, Nvidia's outstanding performance pushed the company's stock price to continue to rise. On May 23, Nvidia's stock price broke through the $1,000 mark for the first time, and its market value reached an astonishing $2.5 trillion. This milestone is less than a year after it broke through the $1 trillion market value.

Tech giants bet on AI to snap up Nvidia chips

Big technology companies such as Microsoft, Google, and Apple all regard artificial intelligence as an important development direction and invest a lot of money. Among them, many funds are directly used to purchase Nvidia's chips, which undoubtedly provides a strong impetus for Nvidia's growth.

Nvidia has undoubtedly become one of the biggest beneficiaries of the artificial intelligence boom. In its latest earnings report, the company said revenue in its data center division soared a staggering fivefold as customers rushed to buy its high-performance chips.

AJ Bell investment analyst Dan Coatsworth (Dan Coatsworth) explained Nvidia's soaring stock price: "Nvidia's business development momentum is strong and its growth prospects are broad, while the theme of artificial intelligence is still full of vitality and influence. Investors seem to be deeply attracted by this moving melody and can't stop."

Apple stock, long seen as a blue chip on Wall Street, has faced no small challenge in recent months. Due to weak iPhone demand and intensified competition in the Chinese market, Apple's stock price has gradually lagged behind other large technology companies and has continued to fall this year.

Earlier this year, Microsoft managed to overtake Apple as the world's most valuable company by market capitalization thanks to the returns from its early investment in artificial intelligence in cloud computing services.

The rise in Nvidia stock has also benefited from the involvement of new artificial intelligence startups, notably xAI, founded by Tesla CEO Elon Musk, which has emerged in the industry-wide race. xAI recently received a total of about $6 billion in investments aimed at developing the next generation of A.I. chatRobotGrok, directly challenging rivals like OpenAI's GPT-4 and Google's Gemini.

Despite criticism that xAI is temporarily behind its peers in technology, the company has shown its ambitions by upgrading its new model, Grok 1.5. Musk pointed out that in order to train the next-generation product "Grok 2", xAI's demand for Nvidia's cutting-edge chips will reach a staggering 100,000. Experts believe that xAI is expected to use the huge user data of Musk's social platform X (the platform has 400 million users) to further improve its artificial intelligence model and provide solid support for its future development.

What challenges does Nvidia face?

Although Nvidia is in a booming growth phase, it still faces a series of challenges, including high investor expectations, potential market saturation risk, supply chain instability, and pressure from strong competitors such as AMD and Intel.

Overreliance on the AI chip market could cause Nvidia's stock price to fluctuate when market demand or technology changes. In order to maintain its leading position in technology and the market, Nvidia needs to continue to invest a lot of research and development funds. In addition, the application of artificial intelligence technology may raise public concerns about privacy protection and job loss, which may affect market views and sentiment on companies such as Nvidia.

However, the surge in demand for artificial intelligence chips is driving Nvidia to continue to innovate and lead technological progress. For investors, Nvidia's sales growth and market dominance are expected to lead to a rise in the stock price, bringing them considerable returns. The rise of Nvidia highlights the transformative impact of artificial intelligence on the market, and the climb in its stock price marks the market's shift to artificial intelligence-driven growth.

In a report to customers, Ed Yardeni, founder of Yardeni Research, deeply analyzed Nvidia's significant advantages in the field of rapidly developing graphics processing unit (GPU) technology, and emphasized: "In artificial intelligence Companies seeking breakthroughs and leadership in the field inevitably need to rely on the expensive but indispensable GPU chips produced by Nvidia." Nvidia's well-designed GPU semiconductor chips are tailor-made to provide strong power for artificial intelligence.