Keys to Nvidia's success, the most valuable company with US$3.34 trillion

Nvidia

Nvidia has managed to rise to the top of the tech world, surpassing first Google, then Apple, and now Microsoft as the most valuable company in the stock market. Here are its keys to success:

The price of its shares on Wall Street increased by 3.5%, reaching a historic high close to $136. Nvidia is known for manufacturing essential chips for artificial intelligence (AI) software, whose growing demand has significantly boosted its sales and profits in recent years.

Many investors believe in Nvidia's potential for further growth, which has driven up its share price, although some believe they could be overvalued.

Tuesday's rebound has lifted Nvidia's market valuation to $3.34 trillion, nearly double its market capitalization at the beginning of the year. Just eight years ago, each share was worth less than 1% of its current value.

Nvidia has capitalized on fierce competition among AI giants like Microsoft, Alphabet (Google), Meta, and Apple, positioning itself as a leader in the semiconductor market.

Nvidia's success can be attributed to three key factors:

From gaming to artificial intelligence: Initially renowned for its graphics chips in gaming, Nvidia has expanded into artificial intelligence. Its advanced GPUs, such as the H100, play a crucial role in creating sophisticated AI systems.

Competitive advantage: Nvidia foresaw the potential of its semiconductors for AI processing ahead of its competitors. Since 2006, with the introduction of CUDA, the company has led the development of technologies enabling complex mathematical problem-solving with its chips.

Growing demand: Demand for Nvidia's chips for gaming, data centers, and AI applications continues to rise, especially with increasing interest in graphics processors for servers powering advanced AI models.

These are the primary keys to Nvidia's success. Nvidia's future looks promising, although the landscape could shift with advances from rivals like Intel and AMD in AI chip development. For now, Nvidia maintains its dominant position, benefiting from high demand and limited supply in the AI semiconductor market.