AI chip boom continues; Nvidia shares jump

Feb 14, 2024, 09:41 am

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A photo of Nvidia headquarters building in Santa Clara, California, taken on Feb. 5, 2024./ Source: AFP/Yonhap News

Washington correspondent Ha Man-joo

Artificial intelligence (AI) giant Nvidia has become the fifth most-valuable company in the U.S. stock market on Monday after rising to as high as the third place.

Shares of UK chip champion ARM, another key beneficiary of rising demand for AI devices, also jumped 29 percent on the day.

Shares of Nvidia rose nearly 3 percent to a record high of over $740, bringing its market capitalization to $1.83 trillion, surpassing Alphabet’s $1.82 trillion and Amazon’s $1.8 trillion to rank third following Microsoft and Apple.

Nvidia closed the trading day with a $1.785 trillion valuation, returning to fifth place again. However, there are many predictions that it will return to be the third most valuable public company because there is enough room to rise in the future.

Alphabet shares fell 0.99 percent to close at $1.84 trillion while Amazon fell 1.21 percent to $1.79 trillion.

Nvidia’s stock more than tripled over the last year. Its stock soared more than 45 percent this year alone. The decisive factor is that OpenAI unveiled its generative AI ChatGPT in November 2022, and Google and Amazon jumped into the generative AI market. This is because Nvidia has an 80 percent share in the AI chip market.

This achievement highlights Microsoft’s boom in AI that brought dominance in the market, beating Apple in two years. Microsoft has a capital and business partnership with OpenAI, and its revenue from its Azure cloud platform and related services rose 30 percent in the quarter ended Dec. 31, including a 6-percentage point boost from its AI technologies.

AI boom is also a major factor in Arm Holdings’ stock price, which surged 29 percent to $148.97 on the same day, and it’s now worth almost $153 billion, CNBC said.

Arm is now up 93 percent since it reported quarterly financials on Feb. 8, though without any clear catalyst for Monday’s move. The stock has almost tripled since its initial public offering in September.

Last week, Arm said it could charge twice as much for its latest instruction set, which accounts for 15 percent of the company’s royalties, suggesting it can expand its margin and make more money off new chips. It also said it was breaking into new markets, such as cloud servers and automotive, due to AI demand.

#AI chip #Nvidia #Arm