Nvidia CEO Jen-Hsun Huang
Photo: Robert Galbraith / REUTERS
Anyone who bought shares in chipmaker Nvidia in October 2022 is likely to have made a dazzling deal. Since then, the stock market value of the US group has quadrupled. On Tuesday, the company's value even exceeded the psychologically significant mark of one trillion dollars for the first time. The main reason for the boom is the increasing global demand for chips. This is also fueled by the recent hype about artificial intelligence (AI).
Nvidia is the first chip company to make it into the exclusive round of ultra-valuable companies: The other US companies with a market capitalization of more than one trillion dollars are the online retailer Amazon, the iPhone provider Apple, the software company Microsoft and the Google parent company Alphabet. From abroad, the Saudi Arabian oil producer Saudi Aramco still plays in this league.
Israel's new supercomputer
Nvidia had published an optimistic outlook last week, to which numerous analysts reacted by raising their forecasts. They received additional tailwind from the company's announcement that it would build one of the world's fastest supercomputers for AI applications in Israel. "Israel-1" will achieve a computing power of up to eight exaflops. One exaflop is equal to one trillion – that's a 1 with 18 zeros – calculations per second. "Generative AI is on the rise everywhere these days," said Nvidia executive Gilad Shainer.
Generative AI such as ChatGPT can simulate human interaction and create texts, images or videos based on a few keywords. This requires a lot of computing power. Graphics chips are particularly well suited for this because they are designed to perform numerous calculations in parallel.
Since the beginning of the year, Nvidia shares have already gained almost 180 percent, more than four times as much as the Philadelphia semiconductor index. Only in the first half of 2001 had it gone even steeper uphill for Nvidia papers. Rivals AMD, Marvell and Intel were also hit by investors on Tuesday. These shares each gained about three percent in pre-market trading.