Capitalization Nvidia Overtook Google... and Russia
American corporation Nvidia on Wednesday night sharply went up, in a matter of hours its capitalization gained 8% and now the company has become not only the largest semiconductor manufacturer in the world, but also the 3rd largest capitalization company in the world, displacing Alphabet from this place.
What is the reason for such rapid one-day growth? Mostly with the incredibly good results for this past last quarter of 2023.
According to the published reports, the company's revenue for the 3 months rose 265% to $20.4 billion!
In just one year, the company's net income rose to $12.3 billion, a 770% increase in 12 months. No wonder the company is now valued at $1.7 trillion.
The phenomenal financial result was made possible by increased demand for chips from companies developing artificial intelligence. Today, this category of customers is key to Nvidia's business and accounts for about 40% of generated revenue.
The development of artificial intelligence has increased demand not only for chips specialized for these tasks, but also for cloud computing in general. The company's server division grew 409% over the year.
The smallest share of revenue now comes from gaming retail, they generated $2.9 billion in sales for the year. Just 10 years ago this was a key area for the company, now it now accounts for a negligible share.
The situation with Nvidia is very much reminiscent of a gold rush, when all market participants are trying to occupy the best niches in the emerging new market. Nvidia in this case acts as a seller of shovels.
The parallels of comparison with the gold rush, however, end there. Artificial intelligence will soon determine the competitiveness of all sectors of the economy. Whoever is the first to be able to create basic niches will be able to set the rules for the rest of the world.
**By the way, now in addition to overtaking Google in terms of capitalization, it has now simultaneously overtaken Russia's GDP for 2023. **
Curiously, despite its size, Nvidia does not have its own production facilities at all. Lithography for it is handled by Taiwan's TSMC and Samsung foundries. This, however, does not prevent it from being one of the most expensive corporations in the world. The growth of the last week shows once again that the company's potential does not depend on its size. Even a mega corporation or a small startup can show sharp growth, the most important thing is that it has a demanded product and the right market positioning.
It is obvious that the development of artificial intelligence can no longer be stopped!
Thank you for being here and reading to the end!
Posted Using InLeo Alpha