Nvidia Reaches $3 Trillion Milestone, Driven by AI Innovation

Last year, Nvidia’s CEO, Jensen Huang, told graduates to chase their dreams without hesitation: “Run. Don’t walk.” Santa Clara chip company is ahead of Apple and has reached a market capitalization of $3 trillion on Wednesday.

Now the world’s second-most-valuable company, Nvidia joins the elite $3 trillion club, which includes only Microsoft and Apple. The speed of Nvidia’s rise is amazing. Apple took nearly three years to climb from $2 trillion to $3 trillion, and Microsoft needed about two and a half years. Nvidia made the leap in just over three months.

The reason behind Nvidia’s rapid ascent is clear. Investors are increasingly confident that Nvidia’s graphics processing units (GPUs) are essential for the AI revolution. Major AI players like OpenAI, Meta, and Google rely heavily on Nvidia’s chips.

In May, Huang highlighted Nvidia’s dominance in the AI sector by reporting a staggering 262% year-over-year increase in revenue for the first quarter of 2024, reaching $26 billion. Nvidia’s software, particularly its CUDA program, also plays a significant role, providing developers with an easy-to-use system for various complex AI tasks and training.

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Nvidia’s entry into the $3 trillion club underscores the immense faith being placed in AI. Last month, Huang announced that Nvidia would accelerate its chip release cycle from every two years to every year to meet the growing demand for more powerful hardware, as companies strive to develop smarter AI models.

Microsoft has also benefited from AI and has become the world’s most valuable company thanks to strategic investments in AI such as OpenAI under the leadership of Satya Nadella.

Now Apple is preparing to focus more on AI, with plans to announce a partnership with the ChatGPT maker at its Worldwide Developers Conference next week.

Nvidia’s journey was full of challenges. Despite potential hurdles, AI is driving rapid growth for companies like Nvidia. At its current pace, Nvidia could soon be eyeing a $4 trillion valuation.