As of the close of U.S. stocks on Tuesday, the total market value of AI chip overlord Nvidia (NVDA.US), which Goldman Sachs calls "the most important stock on earth", has surpassed consumer electronics giant Apple (AAPL.US) and has won the title of "the world's most valuable company". The throne highlights the absolute dominance of "artificial intelligence", an extremely hot investment theme, on Wall Street and even the global stock market.
Nvidia recently squeezed out Intel (INTC.US) and successfully entered the Dow Jones Index. Shortly thereafter, its total market value beat Apple and regained the title of "King of the Stock Market" after 5 months. We have witnessed how artificial intelligence can reshape the stock market. However, the "Nvidia myth" seems to be unfinished! In the eyes of many Wall Street analysts, the crazy rise in Nvidia's stock price is far from stopping.
NVIDIA's stock price closed up 2.84% on Tuesday to US$139.910, with a market value of an astonishing US$3.43 trillion, fully ahead of Apple's total market value of US$3.38 trillion. Microsoft (MSFT.US), another technology giant that was surpassed by Nvidia last month, has a market value of approximately US$3.06 trillion. By fully embedding the large OpenAI model into its flagship software products such as Office, Microsoft has also been firmly in the "global" position for a long time. The highest market capitalization company" throne.
Nvidia can be called the "hero of cool novels"
NVIDIA's "Road to Godhood" is like the core male protagonist of a Shuangwen novel. Since the end of 2022, Nvidia's stock price has soared by an astonishing 850%. From the stock price's periodic low in October 2022, the stock price has soared by an incredible 1,000%.
"In the past few quarters, people seem to be mainly concerned about inflation data, employment data and 'Nvidia data.'" said Fal Anina, director of research at James Investment Research. “Nvidia’s market value surpassing Apple’s is not only a sign that it is one of the biggest beneficiaries of the AI infrastructure cycle, but also a sign of expectations that the AI craze will continue to sweep the world.”
According to statistics, chip giant Nvidia currently accounts for approximately 7% of the total weight of the US stock market index, the S&P 500 Index, and contributed approximately 25% of the 21% increase in the benchmark index this year . NVIDIA closed as the "world's most valuable company" for the first time in June. At that time, its market value slightly surpassed the technology giant Microsoft and became the world's largest listed company. However, this glorious title only lasted for one day. And it was occupied by Apple for a long time. This time, NVIDIA first surpassed Microsoft and soon after surpassed Apple, once again winning the "market number one" title.
In the U.S. stock market, the "magnificent seven" of the seven technology giants, including Nvidia, can be said to have increasingly high "artificial intelligence content". The seven technology giants in the U.S. stock market that occupy high weights in the S&P 500 Index and the Nasdaq Composite Index are the "Magnificent Seven". They include: Nvidia, Apple, Microsoft, Google, Amazon, Meta Platforms and Tesla.
Apple recently launched the iPhone 16 series of AI smartphones, which may lead to a new round of Apple smartphone upgrade cycles; Microsoft, Amazon and Google parent company Alphabet, the cloud computing business of these three technology giants can be said to be related to artificial intelligence. The relevance of The FSD fully autonomous driving created by the AI supercomputing system has set off a global trend of autonomous driving.
What's more important is that, with the exception of Apple, these companies are Nvidia's largest customers, and they still emphasized their commitment to huge expenditures on artificial intelligence in their recent earnings conference calls. Executives of these technology giants all Published the comment "continue to burn money" . Wall Street investment institutions generally say that NVIDIA will continue to prosper and develop, and will remain one of the biggest beneficiaries of the global AI boom for some time to come. Among the seven major technology giants, except for AI chip leader Nvidia, the other "Big Six" have announced financial reports. Nvidia will release its earnings report after the U.S. stock market closes on November 20, Eastern Time.
NVIDIA is not only the largest company by market capitalization in the field of artificial intelligence, but also one of the best-performing stock targets in the US stock market this year. NVIDIA's stock price has risen 183% this year, making it the third-largest stock in the S&P 500 Index this year, second only to Vistra Corp (VST.US) and data analysis software company Palantir Technologies (PLTR.US), and these two have led the gains. Companies in the S&P 500 Index have also benefited from the global craze for deploying artificial intelligence. Vistra has benefited significantly from the extremely huge power demand brought about by the surge in the construction scale of data centers, the core infrastructure project of AI. Palantir can be said to be the absolute leader in AI software applications. leader.
Recently, Nvidia has been able to completely calm investors' concerns that its Blackwell architecture AI GPU will be difficult to mass-produce due to chip manufacturing engineering obstacles, and after technology giants revealed their determination to continue to spend heavily on artificial intelligence, Nvidia's long-term growth Concerns about the future have also dissipated significantly, resulting in a strong stock rally in the near future, helping it win the title of "the world's most valuable company".
According to analyst forecast data compiled by the agency, analysts generally expect Nvidia's revenue to more than double this fiscal year and increase another 44% in the next fiscal year. Wall Street analysts have been continuously raising their expectations for Nvidia's revenue and profit per share in the past quarter.
In addition to the bullish sentiment driven by "Blackwell optimism", the recently announced results of TSMC (TSM.US), Nvidia's exclusive AI chip manufacturer, show that global AI chip demand is experiencing "blowout growth", which has also indirectly boosted Nvidia's stock price. has risen, and TSMC executives said that CoWoS advanced packaging production capacity will not be able to meet market demand until 2026. CoWoS S/L/R advanced packaging production capacity is crucial to the production capacity of a wider range of AI chips such as NVIDIA Blackwell AI GPU.
ChatGPT developer and leader in the field of generative AI, OpenAI’s latest round of financing brought its valuation to US$157 billion, which also helped the global artificial intelligence investment boom continue to heat up. OpenAI recently released a large artificial intelligence model with extremely powerful AI reasoning capabilities. This is also an area that Google parent company Alphabet is focusing on. This technology field urgently needs the support of huge AI reasoning computing power, which means that the demand for NVIDIA AI GPU is almost Endless.
"The new king of the stock market" Nvidia's rise is far from stopping! Next stop, a market value of US$5 trillion?
"The impact of artificial intelligence can be said to be growing. Large technology companies around the world are investing hundreds of billions of dollars, of which Nvidia has benefited the most." Anina from James Investment said. "Overall, the outlook remains very positive."
Global companies, including the "Big Six", are still unstoppable in their "money-burning wave" of artificial intelligence. The stock logic support closely related to AI chips can be described as extremely hard-core. The rising stock prices of AI chip leaders such as NVIDIA may be Far from stopping. In particular, Nvidia, the AI chip leader with a share of 80%-90% in the field of data center AI chips, may continue to hit record highs. It may only be a matter of time before it breaks through the $150 mark widely expected by Wall Street analysts. Wall Street financial giant Bank of America recently reiterated its "buy" rating for Nvidia, and significantly raised its target price within 12 months from $165 to $190, reiterating its "buy" rating.
According to the latest forecast data from Wall Street financial giant Citigroup, by 2025, the data center-related capital expenditures of the four largest technology giants in the United States are expected to increase by at least 40% year-on-year. These huge capital expenditures are basically linked to generative artificial intelligence. , which means that the computing power requirements of AI applications such as ChatGPT are still huge. Citigroup said that this means that the giants' spending on data centers is expected to continue to expand significantly on top of the already strong 2024 spending. The agency expects this trend to be significant for Nvidia and data center interconnect (DCI) technology providers. Our stock price continues to bring very heavy positive catalysts.
Solita Marcelli, chief investment officer of UBS Global Wealth Management Americas, said total sales of chip companies closely related to artificial intelligence are expected to jump to $245 billion by 2025 from $168 billion this year. AMD CEO Su Zifeng recently stated at a new product launch that the demand for data center AI chips, including AI GPUs, far exceeds expectations, and it is expected that the data center AI chip market will reach US$400 billion by 2027. And it will further rise to US$500 billion in 2028, which means that the global data center AI chip market size is expected to grow at a compound annual growth rate of more than 60% from 2023 to 2028.
In a research report, Rosenblatt, another Wall Street investment institution, significantly raised its 12-month price target for Nvidia from $140 to an astonishing level of $200 per share, ranking among Wall Street's highest target prices for Nvidia. According to the Rosenblatt chip industry analyst team, Nvidia's market value is worth US$5 trillion based on the revenue growth rate of software with CUDA as its core.
The Rosenblatt analysis team said that based on expectations for the potential prosperity of NVIDIA's CUDA-core software business, even if the stock price of AI chip overlord NVIDIA experiences a period of skyrocketing, the chip giant's stock price will continue to rise in the next 12 months. Therefore, in addition to the huge GPU revenue generated by CUDA being firmly bound to NVIDIA AI GPUs, and the large-scale application of the enterprise-level CUDA platform, the software business derived from the CUDA platform as the core is also the reason why NVIDIA achieves huge revenue generation. engine.
CUDA ecological barriers can be said to be NVIDIA's "most powerful moat". NVIDIA has been deeply involved in the global high-performance computing field for many years. In particular, the CUDA computing platform it created is popular around the world. It can be said to be the preferred software and hardware collaboration system in high-performance computing fields such as AI training/inference. CUDA accelerated computing ecosystem is a parallel computing acceleration platform and programming assistance software developed exclusively by NVIDIA, allowing software developers and software engineers to use NVIDIA GPUs to accelerate parallel general-purpose computing (only supports NVIDIA GPUs, and is not compatible with mainstream GPUs such as AMD and Intel) .
CUDA can be said to be a platform that is extremely dependent on the development of generative AI applications such as ChatGPT. Its importance is as important as the NVIDIA AI GPU hardware system, and it is crucial for the development and deployment of large artificial intelligence models such as GPT. With its extremely high technological maturity, absolute performance optimization advantages and extensive ecosystem support, CUDA has become the most commonly used and comprehensive collaboration platform in AI research and commercial deployment.