Nvidia Predicts AI Boom, Gains $200bn Value
Nvidia's worth increased by 25% because of its projection of high demand for computer chips. This demand will mainly come from artificial intelligence products like ChatGPT.
Nvidia's shares went up by 24% after telling people about something new. This made their company worth over $900bn. It used to be worth $755bn just the night before.
In 2023, the share price had doubled due to optimism about generative AI products. These need big data centers with lots of semiconductor chips to work.
Last year, OpenAI created ChatGPT which led to a lot of excitement. ChatGPT is a chatbot that can answer questions in a way that sounds like a human. However, it's not always accurate.
Technology has been developing quickly. It includes pictures, audio, and video that are realistic. Even experts on AI don't know what the technology can do or if it's dangerous.
Lots of companies are trying to figure out how to use AI in their businesses. Some people think this might be a problem. Also, companies that make computer chips are getting mixed up in the fight between the U.S. and China about who can send chips where.
Nivadia had a tough time in 2022 due to fewer sales for its graphics chips. It couldn't buy Arm from Japan's Softbank because of competition regulations. But, it will break its highest share price from late 2021 when US markets open on Thursday.
Jensen Huang, boss of Nvidia, thinks America could cause big trouble if trade is limited. The US has stopped China getting some chips made with American tools. China has now told important companies to stop buying from Micron.
The craze for AI has helped Nvidia and businesses alike. They provide hardware for complex models with billions of inputs.
Last Wednesday, the company said they made $7.2bn in revenue from January to April. It's 10% more than what analysts predicted. But, investors are most interested in future sales. Nvidia thinks they'll make $11bn from May to July, which is more than 50% higher than what Wall Street predicted.
Matt Bryson, an analyst at Wedbush Securities, says Nvidia exceeded expectations. The company had a bigger guide than ever before. Bryson has seen a lot in his 20 years of covering technology stocks. Nvidia is a multi-billion dollar company.
An analyst at Jefferies, Mark Lipacis, predicts that Nvidia's data center revenue will go above the combined sales of processors from Intel and AMD. Intel and AMD are two known chipmakers.
Huang predicts that his company will gain from the change in data centres. More companies are using specialized chips made by his firm, due to a surge in the use of generative AI in various areas.
Nvidia will provide more data centre products due to a higher demand.