Nvidia is joining the likes of Apple, Microsoft, Alphabet and Amazon with the company briefly reaching a $1 trillion market cap on Tuesday, making it one of only a handful of companies to do so.
Shares of the chipmaker, based in California in the United States, have risen significantly and nearly tripled since the start of 2023, in part driven by a wave of artificial intelligence (AI) innovations in the past year.
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The animation below highlights Nvidia’s market cap over the past 10 years.
How Nvidia became a $1 trillion company
Nvidia was founded on April 5, 1993 and went public in 1999, with shares trading at $0.82.
In 2016, Nvidia’s market cap began its upward trajectory with the surge in high-end graphics cards sales driven by gaming, AI, virtual reality and the automotive sector.
During the coronavirus pandemic, the business expanded as gaming increased along with the adoption of cloud computing and the increase in Bitcoin mining.
By the end of 2022, Nvidia’s stock plunged by nearly 50 percent from its yearly high due to a slowdown in growth and a broader market selloff.
How is Nvidia powering AI?
Nvidia specialises in designing and producing hardware including graphics processing units (GPUs), which are responsible for tasks such as rendering high-quality graphics for computers and gaming.
About 80 percent of GPUs are manufactured by Nvidia. The high-performance chips are incredibly powerful, making them optimal for industries such as healthcare, gaming and machine learning.
However, the nascence of the AI era has put Nvidia in the spotlight. It recently announced the development of its AI supercomputer, which will run generative AI language applications, data analytics and recommender systems.
Even with its high valuation and large market share, analysts believe Nvidia’s AI chip segment has even more growth opportunity as generative AI forefronts the technology sector.
Who is Jensen Huang, Nvidia’s CEO?
CEO Jensen Huang, 60, has led the company since he co-founded it 30 years ago.
Huang was born in Taiwan then moved to the US, where he studied electrical engineering at Oregon State University before undertaking a master’s degree in the same subject at Stanford University.
Huang is recognised for bringing innovation to Nvidia and shaping the direction of the company, putting it at the forefront of the chip industry.
Four tech companies in the trillion-dollar club
The table below lists the largest technology companies as of June 1, 2023. Apple is the world’s most valuable company with a market value of $2.78 trillion, followed by Microsoft ($2.44 trillion), Alphabet ($1.56 trillion), Amazon ($1.23 trillion) and then Nvidia ($0.93 trillion).