It’s a little strange to think that a company that many people have never heard of or bought anything from – and which has a name they don’t know how to pronounce – could soon become the most popular company in the world. most valued in the world.
Nvidia stock has risen more than sixfold since the start of last year, propelling the chipmaker’s value to nearly $2.8 trillion. It’s now worth more than Amazon (around $1.9 trillion) and Alphabet ($2.1 trillion), and could soon surpass Apple ($2.9 trillion) and even Microsoft ($3.1 trillion). ).
The semiconductor giant stands out from its Big Tech peers, whose products are such an integral part of everyday life. People work, play and communicate on their iPhones, iPads and MacBooks. They search Google, watch YouTube videos, and use Gmail.
An iPad Pro user at Milan Fashion Week. Mélodie Jeng/Getty Images
They browse Facebook, post on Instagram and chat on WhatsApp. They shop on Amazon, read books on Kindle, and watch movies and TV shows on Prime Video. They use Windows PCs, rely on apps like Word and Excel, and play on Xbox consoles.
It’s a similar story with non-tech titans like Warren Buffett’s Berkshire Hathaway, which is worth $870 billion, less than a third of Nvidia. The famous investor’s conglomerate owns consumer brands such as Geico, Duracell and Dairy Queen, and has significant stakes in Coca-Cola, Kraft Heinz and other public companies.
Buffett himself has touted the power of the Apple brand and the indispensability of its products as the main reasons why he made the tech titan his largest holding.
On the other hand, Nvidia is not a household name among people who don’t follow the technology sector or the stock market. Excluding gamers and computer enthusiasts, its products do not touch daily lives in the same way as other large-cap companies and therefore lack cultural cachet.
Nvidia ranked 117th in BrandFinance’s annual global brand rankings in 2023. It climbed to 30th place this year, but still lags behind Allianz and UnitedHealthcare. Apple, Microsoft, Google and Amazon occupy the top four places.
Jensen Huang is CEO and co-founder of Nvidia. Justin Sullivan/Getty Images
Huge demand
Of course, Nvidia’s monstrous valuation factors into investors’ expectations that it will become essential to the company in the future. They are betting that its chips will be key to the artificial intelligence revolution and become ubiquitous in smart devices and the data centers that connect them.
Nvidia’s graphics chips may be niche among consumers, but there’s huge demand for them from companies like Meta. As a result, Nvidia’s revenue more than doubled to $61 billion last year, helping net profit increase sevenfold to $30 billion.
For comparison, Apple’s sales reached $383 billion and profits reached $97 billion last fiscal year, but their growth is much slower.
It will be fascinating to see whether Nvidia becomes a mainstream brand over time or whether it continues to support other companies’ AI efforts while remaining largely out of the spotlight.
businessinsider
