Nvidia (NVDA) has experienced a remarkable year that many companies can only aspire to achieve. Its revenue and stock price have surged, driven by strategic investments in artificial intelligence technologies that are yielding substantial returns amid the generative AI boom. Furthermore, Nvidia has frequently exchanged positions with Apple (AAPL) as the largest publicly traded company globally by market capitalization, even surpassing the $3 trillion milestone. CEO Jensen Huang has become one of the most sought-after executives in Silicon Valley, engaging with a wide array of tech leaders and global figures.
Looking ahead, the company is increasing production of its powerful Blackwell chip designed for AI applications, anticipating shipments worth several billion dollars in the fourth quarter alone, with even greater expectations for the upcoming year. “Nvidia truly possesses the [hardware and software] for the AI computing era,” stated Daniel Newman, CEO of Futurum Group, in an interview with Yahoo Finance.
“Everything is interconnected within the [server] rack and beyond, and the software is highly regarded in the developer community.” However, the competition is not remaining passive. Firms like AMD (AMD) are attempting to attract Nvidia’s customers and penetrate its estimated 80% to 90% market share. Even Nvidia’s own clients are developing chips aimed at reducing their dependency on the graphics giant’s semiconductors.
Wall Street is also taking notice; shares of Broadcom (AVGO), which collaborates with companies like Google (GOOG, GOOGL) to design AI chips, have surged 113% year to date, with a 44% increase in just the past month after CEO Hock Tan indicated that AI could represent a $60 billion to $90 billion opportunity for the company by 2027. Nevertheless, challenging Nvidia will be a formidable endeavor for any competitor, and unseating it as the leader in AI by 2025 seems nearly impossible.
THE DOMINATOR
Nvidia secured a first-mover advantage in the AI sector through early investments in AI software that enabled its graphics chips to function as high-performance processors. It has maintained this lead through ongoing advancements in its hardware and its Cuda software, which facilitates app development for its chips. Consequently, major cloud computing providers, known as hyperscalers—such as Microsoft (MSFT), Alphabet’s Google, Amazon (AMZN), and Meta (META)—are heavily investing in acquiring as many Nvidia chips as possible. In its latest quarterly report, Nvidia announced total revenue of $35.1 billion, with $30.8 billion, or 87%, derived from its data center business.
