• Nvidia announced huge fourth-quarter results on Tuesday, up 265% from a year ago, kickstarting the biggest single-day single-stock rally the market has ever seen.
• Investors are flocking to Nvidia, believing the company has the potential to ride a new wave of innovation that will boost productivity across the economy through faster computers and artificial intelligence.
• “NVIDIA is already making strides in improving efficiency, and this is a huge advantage in this regard because of the amount of computation that must be performed to enable technologies like AI.” said EJ Antoni, Grover M Research Fellow at the Heritage Foundation. Herman Center on the Federal Budget told the Daily Caller News Foundation. “Being on the cutting edge of chip technology puts companies in a position to truly dominate the market.”

American technology company Nvidia has seen its stock price rise in recent years on speculation about the potential economic impact of new computing technologies that some investors believe could significantly improve productivity. It's skyrocketing.

Nvidia posted a huge year-end quarterly profit on Tuesday night, up 265% year-over-year as the company continues to grow at breakneck speed. according to Regarding the company's fourth quarter financial results. Fourth-quarter growth exceeded expectations, leading to a $277 billion gain in stocks on Wednesday. 16.3% In just one day, it was the largest single-day gain in the history of the New York Stock Exchange. according to to Reuters. (Related article: 'A serious problem': The plague of global recession could also affect the US, experts say)

Investor hype about Nvidia is due to the company's stake in the semiconductor market, where artificial intelligence (AI)-related technology commands most of the market share, experts told the Daily Caller News Foundation. Many investors predict that AI and increased computing efficiency will benefit businesses, with the potential for significant productivity gains by using this technology across a wide range of applications.

“NVIDIA is already making strides in improving efficiency, and this is a huge advantage in this regard because of the amount of computation that must be performed to enable technologies like AI.” said EJ Antoni, Grover M Research Fellow at the Heritage Foundation. Herman Center for the Federal Budget told DCNF. “Size is no longer a big issue for chips as data centers can now be placed virtually anywhere, but rising energy prices and environmental regulations have reduced efficiency. We are at the cutting edge of chip technology. This puts companies in a position to truly dominate their markets.”

Nvidia was first founded in 1993 and introduced products related to 3D graphics, especially gaming and multimedia creation. Then, in 1999, he invented the graphics processing unit, a big step in the power of computing. according to Go to the company website. The company also claims to have sparked the modern AI era in 2012 and is far ahead of trends regarding this technology, with other technology companies currently trying to catch up and expand into AI. is leading by a large margin.

“NVIDIA controls most of the chip market for AI-related technologies (about four-fifths),” Antoni told DCNF. “The explosion in AI-related demand is also driving demand for chips, leading to growth projections for Nvidia that were completely unexpected just a few years ago. Like all stock prices, stock prices are speculation about future earnings. , no one knows whether NVIDIA's current popularity is justified because the future is inherently uncertain. This is especially true for AI, where many of the possibilities are unknown.”

Nvidia's stock price has exploded in recent years, peaking at less than $40 per share in early 2019 and over $310 per share in November 2021, before reaching its peak in October 2022. It fell to around $127 per share in March, and eventually rose to around $127 per share. Approximately $800 per share in February 2024; according to Go to Market Watch.

NVIDIA's market capitalization soared $247 billion in one day, breaking a stock market record, Bloomberg reported.

Famous for AI and high-speed computing, #NVIDIA has achieved a major financial milestone with impressive returns.

We have accumulated about 280% inventory over the past year.#AI #cipher #KK pic.twitter.com/Qv9aQ3LP14

— Christian (@ChristiaanDefi) February 23, 2024

“The fact that demand for these products is increasing shows that our society, these companies, educational institutions, and various AI users believe there is great value that can improve our lives. ” says David Inserra. Freedom of Expression and Technology at the Cato Institute told DCNF. “We can't predict for sure that that will be the case. But all the indicators we have show us that the market is saying there's great value here. It would be foolish to ignore that key market indicator. I think.”

Although in its infancy, generative AI powered by the kind of technology Nvidia is leading is already finding applications in business, including customer service, cybersecurity, personal assistants, inventory management, accounting, and more. Masu. according to to Forbes. The United States is also considering military applications for semiconductor technology and AI, and is seeking to block China's access to equipment to maintain its technological and military advantage.

In 2022, US companies will hold approximately 48% of the semiconductor market share, while Chinese companies will hold 7%. according to To Statista. South Korea accounted for her second largest market share at 19%, followed by Japan and her EU at 9%.

The Biden administration has placed a number of restrictions on the semiconductor industry to ensure continued US dominance, including sanctions on several Chinese chipmakers in October 2022 to prevent them from cooperating with US companies. etc. Congress also approved $39 billion in direct funding to chip makers as part of the August 2022 Chip and Science Act.

The rollout of the fund has so far not brought a significant number of chip manufacturing plants online, with some companies pushing back the completion date for new plants to 2025 due to chip price fluctuations and uncertainty about government funding. It has since been postponed.

The growth of generative AI powered by new chips has given rise to new developments in the technology, such as Google's AI chatbot Gemini taking a nuanced position on Israel's violent eradication and the terrorist organization Hamas' position on China's violent eradication. This has also led to concerns that they may be given a biased approach. They are committing genocide against the Uighur people.

Nvidia is part of what's known as the “Magnificent 7” stocks, stocks that have been responsible for most of the stock price growth over the past few years. according to Go to Yahoo Finance. Electric vehicle (EV) company Tesla saw a similar meteoric rise a bit earlier, but remains relatively stagnant well into 2024 as other competitors emerge in the EV space. There are growing concerns that Nvidia will not be able to meet expectations.

“This is always a market dynamic, right? If someone comes along and offers a more desirable product, then certainly so be it,” Inserra said, adding that NVIDIA could lose its current investor hype. He spoke to DCNF about this. “We talk a lot about AI now, but what happens when new kinds of AI, better types, or even more advanced and better types of technology come along and use different kinds of computing power? We don't know what the future of innovation will bring. On that note, yeah, Nvidia may not remain this golden child forever, but from what I've read, they're They seem to be looking for ways to move forward and into new areas in the use of processors for AI, where they currently have that advantage.”

Nvidia declined to comment to DCNF.

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