How Nvidia Is Betting Big On AI

Tanya Taylor
Nvidia becomes the first semiconductor manufacturer in history to reach a value of $1tn. They have successfully capitalized on the AI industry, and their success signals the beginning of an “AI rush”.
Nvidia betting big on AI
Chip Manufacturer Nvidia has invested big in AI and is now reaping the financial rewards. Photo: BoliviaInteligente on Unsplash

After an incredible performance on the stock market last week, today, the chip manufacturer Nvidia reached a value of $1tn. The company joins Microsoft, Alphabet (parent company of Google), Apple, Amazon and Saudi Aramco as the 6th trillion dollar company on the stock market.  

Nvidia is worth more than its rivals, including Intel, combined. Within a decade, it’s grown from $300m annual revenue to $15bn, thanks to the successful launch of AI technology such as ChatGPT last year. You can discover more about how Nvidia is betting big on AI below. 

The Rise Of Nvidia

According to Yahoo Finance, Nvidia was founded in California in 1993. Co-founder Jensen Huang, the 34th richest person in the world and longest-standing CEO in the tech industry, still runs the company. 

Nvidia originally developed chips that turn computer code into images for video games. They quickly outperformed their competitors, and with their success, they pushed into other tech markets such as artificial intelligence processing, data centers and cloud computing. 

Now they make advanced chips which train and run AI systems. Their stock market success comes with an increased demand for their technology since the incredibly successful launch of ChatGPT last year.

Nvidia is the first semiconductor manufacturer to appear on the exclusive trillion-dollar list. 

Smashing Expectations

Nvidia shocked Wall Street investors last week when it’s earnings report exceeded expectations by billions of dollars. Photo: lo lo | Unsplash

Nvidia reached its trillion-dollar target this morning when its stock rose by 6% – taking the share price above $409, as reported by CNBC. The news follows on from the sharp gains the company made last week. 

According to Forbes, last Thursday, the company grew by $184bn and gained 24% percent, making it the third highest one-day market gain in stock market history. They had another 2.5% increase on Friday – taking the value to $963.2bn. 

Furthermore, investors were gobsmacked by the earnings report, which revealed Nvidia made $7.2bn in the first quarter, smashing their $6.5bn target. The company also expects to make $11bn in the second quarter, way above the predicted $7.18bn.

The AI Gold Rush

Many chip manufacturers have gained from AI investment, but industry leaders Intel saw a drop in shares last week. Photo: Rubaitul Azad | Unsplash

As AI continues to show incredible potential in the advancement of our society, investors are going crazy looking for the next AI company boom. However, investing in AI isn’t traditionally a safe option, and major companies such as Microsoft generally provide the least risky investments. 

History tells us that it’s easy for tech to take a beating in the stock market when their products don’t reach expectations. According to The Sydney Morning Herald, Alphabet lost $100bn in February when Chatbot Bard got a question wrong on a promo video. Alphabet has since recovered.  

Nvidia is leading the AI gold rush and claims its success is because graphics chips are better at handling AI workloads than standard processors. Nvidia overtook their rivals Intel in 2020 and currently holds eight times its value.

Many semiconductor manufacturers are benefiting from the success of AI, including TSMC – a Taiwanese company that is up by 4.2%. A Netherlands-based company ASML, was up by 6.25%, and Monolithic Powers Systems saw an increase of 17% in a single day. 

However, last week, Intel stock was down by 5.52%, as traders and investors feel Intel is falling behind with technological development. 


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