AI demand helps drive NVIDIA market cap up by $329 billion since start of this year
NVIDIA’s stock surge increased its market cap by $329 billion since the start of 2023.
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What you need to know
NVIDIA’s market cap has skyrocketed over the last four months, increasing by over 94% since the start of this year (viaThe Street). The uptick is likely due to NVIDIA’s connection to artificial intelligence. While not a new form of technology, AI has been in the public spotlight since OpenAI launchedChatGPTlate last year. Microsoft incorporatingChatGPT into BingandGoogle announcing its Bard chatbotput even more of a spotlight on AI.
Whether ChatGPT, Bard, or another similar form of AI, a large amount of computational power is required to train and power artificial intelligence. That power comes largely from chips made by companies like NVIDIA.
Researchers estimate thatChatGPT needs 30,000 NVIDIA A100 GPUs to operate. Those GPUs cost between $10,000 and $15,000 a piece, meaning NVIDIA could make up to $300 million in revenue off ChatGPT.
With figures like that being shared by experts, it’s not surprising to see NVIDIA’s stock value go up. The company sat at a total market cap of almost $690 billion on April 19, 2023. This year alone, NVIDIA’s market cap has gone up $329 billion.
Market cap isn’t the only way to evaluate how a company is doing, but it’s an important metric when looking at an organization at a macro scale. Stock value fluctuates quickly, making any individual day too small of a sample size to measure a company. But overall trends can provide insight.
NVIDIA stock peaked at $329.85 back in November 2021 (viaYahoo). It dipped to as low as $112.27 in October 2022. It then climbed a bit to 146.12 to end the year. Now, thanks in part to the surge of interest in AI, NVIDIA stock is up to $270.64. That’s not all the way back to the high of a couple years ago, but it’s a sizeable shift.
Of course, AI isn’t the only source of demand for NVIDIA chips. GPUs from the company, such as those in theRTX 40 Series, are popular among gamers and creators. But there’s a reasonable expectation that NVIDIA’s sudden surge in value is due, at least in part, to artificial intelligence.
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With AI drawing interest as quickly as it draws power, Microsoft is also looking to get in on the action. Microsoft has reportedly beentesting its own AI chip, which is codenamed Athena, since 2019. If used to train and power AI, that chip could save Microsoft quite a bit of money, since the tech giant would be able to use its own hardware rather than relying on NVIDIA.
Sean Endicott is a tech journalist at Windows Central, specializing in Windows, Microsoft software, AI, and PCs. He’s covered major launches, from Windows 10 and 11 to the rise of AI tools like ChatGPT. Sean’s journey began with the Lumia 740, leading to strong ties with app developers. Outside writing, he coaches American football, utilizing Microsoft services to manage his team. He studied broadcast journalism at Nottingham Trent University and is active on X @SeanEndicott_ and Threads @sean_endicott_.
