Market capitalization

Nvidia cracks the three trillion dollar mark

The boom in artificial intelligence (AI) has pushed the chip company Nvidia's stock market value over the three trillion dollar (2.76 trillion euro) mark. With a price increase of a good five percent to 1224.40 dollars, Nvidia narrowly overtook Apple and is now number two after Microsoft in terms of market capitalization.

The software giant also gained favor with investors thanks to its artificial intelligence business. They are betting that Microsoft can bring the technology of ChatGPT inventor OpenAI into everyday office life, for example. However, Apple is also expected to make AI announcements at its in-house developer conference WWDC next week. According to media reports, this could involve a partnership with OpenAI, among other things.

Nvidia benefits from all of this: The company's chips play a key role in training software with artificial intelligence in data centers in particular. Nvidia sells thousands of chip systems to Microsoft, Google and the Facebook group Meta, among others.

More in demand than ever
This has caused Nvidia's business figures - and therefore its share price - to skyrocket. In the last quarter alone, turnover rose from 7.2 billion dollars in the previous year to 26 billion dollars - an increase of 262 percent. And demand remains strong: bottlenecks for Nvidia's more powerful new chip systems are expected to continue into next year. At the start of the AI boom at the beginning of 2023, the Group's share price was still around 150 dollars. This year alone, the share price jumped from around 500 to over 1200 dollars.

Nvidia technology was originally developed for graphics cards. However, it then turned out that they were also ideal for computing applications with artificial intelligence. Nvidia's chips thus became a key technology for the future of AI - and the company also benefits from the associated software and services business.

Digital twins
Nvidia technology is now no longer only used for training, but also for operating AI applications, emphasizes CEO Jensen Huang. This potentially represents an even more stable business. This is because although training requires a huge amount of computing power, it is only necessary once per AI model. Huang also assumes that in future AI will generate all kinds of content that is currently retrieved from databases.

Nvidia is also active in the digital twin business, which enables companies to optimize processes in their factories with the help of virtual copies. The company also sells computers for automated and self-driving cars. Rivals such as Intel and AMD are also trying to participate in the AI boom, but have so far been unable to threaten Nvidia's leading position.