On June 18, Nvidia surpassed Microsoft as Wall Street’s most valuable public company, reaching $3 billion, before falling in the following days.
Nvidia, founded in 1993 by Jensen Huang, Chris Malachowsky and Curtis Prien, was born in a San Jose (USA) coffee shop and this Sunday, 31 years later, it reached the top and is one of the ‘magnificent 7’ stocks on the New York Stock Exchange.
On June 18, Nvidia surpassed Microsoft as the most valuable publicly traded company on Wall Street, reaching $3 billion, before falling in the following days.
Its ‘chips’ are used to power many artificial intelligence (AI) applications and this has had an impact on its stock performance.
Chris Miller, author of “The Chip Wars,” tells the story of the technology that ended up dominating the graphics processor market.
Nvidia “had its humble beginnings not in a trendy Palo Alto cafe, but in a Denny’s,” an American chain of cafeteria-style restaurants, typically located in gas stations, “in a troubled part of San Jose,” Miller reports.
Huang, who is the chief executive officer, was born in Taiwan but moved to Kentucky as a child and worked for LSI, a chipmaker in Silicone Valley.
“Nvidia’s first group of customers (video and gaming companies) may not have seemed the epitome of sophistication, but the company bet that the future of graphics would be in the 3D production of complex images,” says Chris Miller.
Nvidia designed chips called GPUs (Graphic Processing Units), capable of processing 3D graphics, but also an ecosystem of software around them.
Compared to the competition, Nvidia chips are very fast, which at a time when AI is at the center of technological development is a differentiating factor.
There has been an insatiable attitude towards Nvidia’s chips to power AI applications, which has resulted in them being “overvalued” on the New York Stock Exchange, raising some fears about a possible bubble in the market.
However, its potential has not scared off investors and it is currently in the restricted group of the ‘magnificent 7’ stocks: Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla.
The semiconductor company offers the potential for continued growth as it ushers in a new era that will remake the economy, analysts say.
Based in Santa Clara, 75 kilometers south of San Francisco, the technology company began its first steps with the help of the Japanese company Sega. Later, the first alliances began with Microsoft, which chose Nvidia to design the graphics cards for the Xbox console at the beginning of the 21st century.
In 2001, the technology company entered the S&P 500, becoming the semiconductor company that quickly reached $1 billion in revenue.
In 2005, it announced that it was developing processors for Sony’s PlayStation 3 and, later, GPUs that were tailored to the needs of manufacturers such as Apple – with its MacBook – and for the Android tablets that marked the following decade.
Generative AI has been accelerating in its growth. For example, OpenAI’s ChatGPT has been using Nvidia chips since 2022.
Source: Observadora
