While the chipmaker’s volatility has sparked some concerns about the sustainability of the stock market’s artificial intelligence (AI) boom, experts say Nvidia’s ups and downs are “bumps in the road” as it continues its meteoric rise.
“The godfather of AI, Jensen [Huang], and Nvidia are leading the AI revolution, and I view this recent sell-off as a blip on the radar,” Wedbush Securities analyst Dan Ives told The Hill, referring to the company’s co-founder and CEO.
Nvidia crossed the $3 trillion mark for the first time in early June, joining the elite club previously inhabited by only Microsoft and Apple. Less than two weeks later, the chipmaker briefly overtook Microsoft as the world’s most valuable company.
The milestones reflect the rapid ascent of Nvidia, which first crossed $1 trillion just more than a year ago. By February, the company had topped $2 trillion. Since the beginning of the year, its share price climbed more than 150 percent.
Nvidia’s success has largely been driven by its graphics processing units (GPUs), which have been central to powering the AI boom. The chipmaker’s GPUs are in high demand as major tech companies race to develop and release their own AI models.
“They’re the only game in town,” Ives said, adding, “Their GPUs, their chips are the new oil and gold for tech.”
However, the chipmaker took a turn last week when its share price plunged 16 percent and caused the company to shed $550 billion in value — more than the entire market capitalization of Walmart Inc. or Visa Inc.
Nvidia’s stock partially rebounded in the following days, bringing its market capitalization back above $3 trillion. It is currently the third most valuable company in the world, once again behind Microsoft and Apple, with no other competitor close behind.
Read more in a full report at TheHill.com.
