Technology

Nvidia Up 182% This Year to Market Cap of $3.4 Trillion

Douglas A. McIntyre

Published: December 27, 2024 8:45 am

If any company is the hands-down winner of the global artificial intelligence (AI) revolution, it is Nvidia Corp. (NASDAQ: NVDA). Its stock has risen 182% this year. Its market cap, at $3.42 trillion, puts it at number two globally, behind only Apple Inc. (NASDAQ: AAPL), which has a market cap of $3.92 billion. To gauge how large its market cap has become, it is over two times that of Meta Platforms Inc. (NASDAQ: META).

Nvidia’s five-year trend shows the extent to which its market value came out of nowhere. Its stock is up 2,263%. The S&P 500’s gain in the period is 86%. Apple’s share price is 257% higher.

It was impossible to see Nvidia’s success five years ago. It was a high-end graphics chip company, not considered in the same category of chip makers as Intel and AMD, which controlled the PC and server industries.

The key development of AI’s perceived huge contribution to global tech was Microsoft Corp.’s (NASDAQ: MSFT) $13 billion investment into OpenAI, the perceived industry leader, in April 2023. It put OpenAI’s total value at $29 billion. An investment round two months ago put that figure at $157 billion, meaning it increased five times in under two years.

For the past two years, Nvidia has continued to prove it is AI’s global engine. In the most recent quarter, its revenue was up 94% year over year to $35.1 billion. Per-share earnings were up 111% to $0.78. The numbers are expected to rise at nearly that rate for at least a year and perhaps much longer. That means it could have revenue nearly as much as Microsoft’s current figure in two years.

There is no evidence that Nvidia’s place in AI industry will be weakened or, at this point, even challenged.

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