On June 18, 2024, Nvidia Corporation (NVDA) reached a historic milestone, achieving the highest market capitalization globally. This accomplishment followed a remarkable 3.6% surge in its stock price that day, propelling its market cap to an astounding $3.34 billion and surpassing tech giants like Microsoft and Apple.
Nvidia's success is rooted in its phenomenal year, with its stock price skyrocketing by an impressive 170% since the beginning of 2024, fueled by a strong first-quarter earnings report. Even more impressive is the company's ninefold stock price increase since late 2022, coinciding with the explosion of generative artificial intelligence (AI).
A key driver of Nvidia's dominance is its commanding presence in the AI chip market. The company boasts an 80% market share for AI chips powering data centers, essential for major players like OpenAI, Microsoft, Alphabet, Amazon, and Meta, all at the forefront of AI application development. This dominance is evident in Nvidia's recent quarterly report, which revealed an astounding 427% year-over-year surge in data center business revenue, representing a remarkable 86% of its total sales.
It's worth noting that Nvidia's path to success wasn't always focused on AI. The company initially gained recognition for its high-performance graphics processing units (GPUs) designed for the gaming industry. While ventures into cryptocurrency mining chips and cloud gaming subscriptions had limited success, the strategic shift towards the booming AI field catapulted the company to new heights.
This strategic move has not only benefited Nvidia but also significantly increased the wealth of its co-founder and CEO, Jensen Huang. A recent Forbes report ranked Huang as the 11th wealthiest individual globally, with an estimated net worth of $117 billion.