The global chip manufacturer NVIDIA has beaten tech titans Amazon, and Google’s parent company Alphabet in market value. The company’s stock quadrupled in the last 15 months, as investors have been bullish on Nvidia’s leading position in the field of Artificial Intelligence (AI).
The whopping 17,000 per cent gain in Nvidia’s stock over the past decade is the best return of any stock on the S&P 500. Simply put, a $1000 investment in Nvidia in a decade would be worth over $175,000. In the AI race, Nvidia has an advantage, it by far, is the most prominent producer of the semiconductor chip technology that powers Generative AI (GenAI).
The global chip manufacturer’s earnings before interest, taxes, depreciation, and amortization (EBITDA), has exploded by more than 500 per cent last quarter on a year-on-year basis, primarily due to the growth in its AI unit. Making it far stronger than Alphabet and Amazon’s 20 per cent or more earnings in the comparable period.
The growing spends on AI has impressed investor’s potential for Nvidia to capatalise on this market. the chip manufacturers’ gross revenue and profits are however at $9.2 billion, smaller than Microsoft and Apple’s $22 billion.
The company continues to remain popular on Wall Street, even after a 50% run-up this year. It is the top pick for both Bank of America and Goldman Sachs analysts. Each has a $800 price target for Nvidia, projecting an 8 per cent upside to the stock. The company is set to report its earnings next Wednesday.
