Nvidia market rally: What's behind the US-based company's bull run?

The market data shows that the Nvidia's shares have rallied over 250 per cent in the last one year

Over the last one year, tech major Nvidia has witnessed a rally in its stock price in the US markets. In the last few weeks, Nvidia, based out of California, surpassed companies like Google, Meta and Amazon in market capitalisation. Currently, it is the third most valued company in the US, only behind Microsoft and Apple. In the world, it is the fourth most valuable company, with Saudi Aramco in the third spot.

The market data shows that the company's shares have rallied over 250 per cent in the last year. In 2024 alone, the company's market cap has jumped over 46 per cent.

Nvidia: Leading the AI boom

Since November 2022, artificial intelligence (AI) has become the talk of the tech world. With OpenAI's ChatGPT, and now Sora, the integration of AI with existing jobs has accelerated. Most tech companies like Google and Amazon are trying to move as rapidly in the field as possible.

But Nvidia is already ahead of these tech majors in the field of AI.

According to reports, ChatGPT was trained using 10,000 graphics processing units (GPUs) of Nvidia clustered together in a Microsoft computer. As of 2023, Nvidia had around 95 per cent of the GPU market for machine learning.

In a report by BBC last year, an expert was quoted as saying, "What Nvidia is to AI is almost like what Intel was to PCs."

Focus on AI by others

Nvidia sold 2.5 million chips last year, as per a report by the New York Times (NYT). This has led most investors, as well as companies, to focus more on AI and related technologies.

In September last year, Amazon said it would invest up to $4 billion in Anthropic, a San Francisco start-up working on artificial intelligence (AI). Amazon spent $200 million on making 100,000 chips.

Google, which has come up with its AI-based chatbot Bard, spent $2-3 billion on building about a million of its own AI chips. Microsoft, which is also partnering with ChatGPT, said it had begun testing its first AI chip. Meta also has its own AI chip project.

Recently, Bloomberg reported that SoftBank Group founder Masayoshi Son is seeking as much as $100 billion to bankroll a chip venture to compete with Nvidia. The project has been code-named Izanagi.