Beth Kindig, Principal Technology Analyst at I/O Fund, discusses expectations for Nvidia’s earnings report on “Making Money.”
Wall Street is eagerly awaiting Wednesday’s latest earnings report from Nvidia, a company that has grown rapidly amid a boom in artificial intelligence (AI) technology.
Nvidia has leveraged its dominance in the AI chip market to become the third largest public company in the United States by market capitalization. Estimates put his Nvidia’s market share in highly sought-after AI chips at at least 80%, and demand for semiconductors used to train AI models continues to grow.
The company’s recent breakthrough comes nearly 30 years after its founding, when the AI boom was well over the horizon.
Nvidia was founded in 1993 by three electrical engineers, Jensen Huang, Chris Malachowski, and Curtis Priem, who hatched a plan at a Denny’s restaurant in California’s Bay Area. Its initial focus was on making his 3D graphics available in video games and multimedia. They particularly saw the gaming market as a favorable opportunity to tackle difficult computational problems that could generate revenue and drive future growth.
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In just over 30 years, Nvidia has grown from a struggling technology startup to the third-largest company in the United States by market capitalization. (Justin Sullivan/Getty Images/Getty Images)
A few years after its release, Nvidia fell on hard times after failing to develop a graphics card for the Sega Dreamcast video game platform. With little financial leeway, the company laid off more than half of its employees.
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Despite this setback, an investment from Sega America CEO Shoichiro Iruka came to the rescue for Nvidia and CEO Hwang, allowing the company to refocus on new graphics product lines. .
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| NVDA | NVIDIA Inc. | 953.86 | +6.06 | +0.64% |
The company revolutionized the computing industry when it introduced a product called the graphics processing unit, or GPU, in 1999. Nvidia went public that same year and by the early 2000s its stock was trading for less than $1 a share.
In 2006, Nvidia developed the CUDA software platform and API that allowed programmers to extract more computing power from GPUs. Over the next few years, AI research teams began using massive amounts of GPUs to accelerate deep neural networks. Nvidia calls this the “big bang of modern AI.”
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Nvidia CEO Jensen Huang showcases Nvidia technology at the Nvidia GTC Artificial Intelligence Conference held at SAP Center in San Jose on March 18, 2024. (Justin Sullivan/Getty Images/Getty Images)
The application of GPUs led to a 50x increase in deep learning speed over the three years leading up to the end of 2015. By the end of that year, Nvidia’s stock was trading at $8.24 per share, and the company continued to develop more advanced GPUs. Nvidia released its groundbreaking RTX GPUs in 2018, and the company’s stock price exceeded $60 per share.
The next few years saw further advances in GPUs and AI-enabled chips, resulting in Nvidia contributing to the creation of the Metaverse. The company’s stock price remained above $100 per share throughout 2022, and began to soar the following year due to the rise of AI.
Nvidia launched its Grace Hopper superchip in 2023, and by the end of the year, the stock price was just under $500 per share. In 2024, further advances such as the announcement of Blackwell, the next-generation AI chip to replace Grace Hopper, pushed the stock even higher.
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Nvidia co-founder and CEO Jensen Huang recently announced the company’s next-generation AI chip. (I-Hwa Cheng/Bloomberg via Getty Images/Getty Images)
As of Tuesday’s close, NVIDIA shares were trading at $953.86 per share, up 232,548% since its initial public offering in January 1999. Over the past five years, the company’s stock price has risen 2,528%. And in the last year, it’s up nearly 206%. So far in 2024, Nvidia shares are up 98%.
Beth Kindig, principal technology analyst at I/O Fund, said on FOX Business Network’s “Making Money With Charles Payne” that Nvidia can expect more success in the near future.
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“This earnings call is a wrap, but the ultimate fireworks will begin at the end of this year, because Nvidia will now compete with Nvidia,” she said. “They’re reducing the release generation cycle from two years to one year, and they’re doing that to ensure that the next generation can pry that (capex) budget away and reallocate it to the next generation. is.”
“This is bold. It’s bold for them to go that fast. It’s never been done before. So by the end of this year, the word will be Blackwell.”
