Stock markets tend to have cycles, in these periods there are ups and downs, crashes and booms; Of course, many factors affect the short, medium and long-term trajectory.
But there are times when these markets, and especially some stations or sectors, surprise with their performance, this is what in fact always keeps the “appetite” alive in the stock markets and this is the new boom.
Artificial Intelligence is unleashing unbridled euphoria for a number of broadcasters that just a little less than 2 years ago seemed to have a complex picture Given the effects that the pandemic generated in its production and distribution chain, today some stations in the market are unstoppable.
The billion dollar club
It all started with a timid rebound at the beginning of this 2023, the previous year the NVIDIA share had lost 50.31 percent, still hit by fears regarding the difficulties that manufacturers of semiconductors, chips and other technological products would still have to cover the demand. But an additional factor has entered the scene since then: Artificial Intelligence (AI).
“NVIDIA was founded IN 1993 with the belief that the PC would one day become a device for consumers to enjoy gaming and multimedia. At the time, there were just over two dozen graphics chip companies, a number that would skyrocket to 70 three years later. In 2006, NVIDIA was the only independent company in operation, ”says the company on its website in Spanish.
It is a relatively young company, just this year it celebrates 3 decades of life, but its steps towards growth have actually been very fast, in 2002, that is, less than a decade after its birth, it began its journey in Wall St.
Those faltering gains from the early days of this year have become in a spectacular gain of 174.46 percent at the close of yesterday Tuesdayonly in May it registers a gain of 44.55 percent, without considering that one operating session is missing in the month, its closing price this Tuesday, at $401.11, is historic and is not based only on a trend and an unusual boom but in historical sales reported in the first quarter of the year as well as in an extremely positive profit guide for the remainder of the year according to the company’s senior managers, driven by Artificial Intelligence, its natural market, in which the company is It has developed and invested since long before the concept became popular.
Nvidia’s shares soared further on May 24 when it announced that it posted net profit of $2.043 billion in the first quarter of its fiscal year, up 26 percent from the same period last year. driven by the development of AI and beating all expectations as well as becoming a historic benefit for the company. Just in this current quarter, expects sales totaling $11 billion; if the forecast comes true, it will double what Wall Street anticipated and a boom will be confirmed that, in addition to being unusual, is for a very long time.
In fact, experts predict that Nvidia’s real business will no longer be graphics cards for personal computers, but artificial intelligence. In fact, ChatGPT, the famous OpenAI tool, is powered by 30,000 chips provided by Nvidia.
Do all these positive data about the company seem insufficient to measure the magnitude of the benefits that this company obtains and those that it could obtain? Perhaps when you learn that the company has entered a very exclusive club on Wall Street, you can better imagine what it is all about.
This Tuesday, NVIDIA became the fifth company to reach a capitalization value of 1 trillion dollars on Wall Street, it is not easy and not everyone reaches it, it is too exclusive a club.
Yesterday NVIDIA joined 4 giants, curiously all technological, whose capitalization value is located at 1 trillion dollars or more. The club’s list is headed by Apple, whose value at the end of Tuesday was 2.7 trillion dollars; Microsoft follows with a capitalization value of 2.6 trillion dollars; Alphabet is worth 1.6 trillion; Amazon is in fourth place with 1.2 billion. And since yesterday Nvidia will be able to count that its capitalization value is already at 1 trillion dollars, and it seems possible that it will maintain it or could even gain ground on that list, because AI does not seem like a passing fad, at least not in many aspects, although there are also factors that lead to debate, such as the use it may have by criminal groups.
The potential of AI
As we said, AI does not seem like a passing fad, regardless of the factors that are currently in the debate; what no one denies is its relevance and power for the coming years, the following decades; There are those who point out that it is even the great and authentic revolution of the digital world, something similar to historical moments, such as the appearance of the printing press or the Industrial Revolution.
The foregoing is still an estimate, but the large operators in the markets consider that there is great potential, so much so that there are already some figures on the market; For example, JP Morgan bank and Wedbush investment firm recently estimated the potential market value of AI at $800 billion over the next decade. To measure, we can point out that this potential value of AI for the next decade represents approximately 58 percent of the current value of an economy like Mexico’s. This means that if AI were a country, it would be worth more than many nations in the world, considering that the Mexican economy is number 14 in the world and that there are 206 countries in the world.
general boom
We mention the case of NVIDIA because of the capitalization value that it reached and the momentum that it registers this year with a historical maximum price and a triple-digit gain in its share price, but in general the companies linked to the chip manufacturing industry and semiconductors register a boom, and everything indicates that it is just the beginning.
In this way, other chip firms, from designers such as Advanced Micro, to manufacturing companies such as Taiwan Semiconductor, of Taiwan, have benefited greatly from the rise of AI; and with them a series of companies and benefits for multiple companies and alternate sectors unfold, it seems that we are just at the beginning of an upward curve with a potential that until now was little expected and of which the benefit has not been fully calculated.
Of course, this boom, which has just started, will have a limit, AI itself is still subject to many considerations between countries, companies and entrepreneurs. Everything that goes up, sooner or later goes down, but while that happens, a company that was born 3 decades ago with the intention of positioning itself one day with its products, today is one of the most valuable on the planet.
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