Nvidia has emerged as a formidable leader in the artificial intelligence (AI) arena, largely due to its strategic foresight and technological prowess. Jensen Huang, the founder and CEO of Nvidia, made a decisive bet on chip technology that is now fueling the AI industry. This move has positioned Nvidia as a key player in AI applications, with the company's valuation soaring beyond $3 trillion (€2.9tn), making it the second-largest company on Wall Street.
Nvidia's groundbreaking work in developing the graphics processor unit (GPU) in 1999 was pivotal in shaping the PC gaming market and revolutionizing computer graphics. This innovation laid the foundation for the company's remarkable growth trajectory. Today, Nvidia's influence extends beyond gaming, as its chips are integral to the development of advanced AI models. Notably, DeepSeek, a Chinese firm, has garnered attention for developing a large language model that competes with ChatGPT and other U.S. counterparts. DeepSeek's model is praised for its cost-effective use of Nvidia chips to train vast amounts of data.
"Widely-available models and compute that is fully export control compliant" – Nvidia
Nvidia's commendation of DeepSeek's work as "an excellent AI advancement" underscores the significance of this development. The anticipation surrounding Nvidia's upcoming financial results is palpable, with Wall Street analysts expecting fourth-quarter adjusted earnings of 85 cents per share on revenue of $38.08 billion (€36.4bn). The company's net income is projected to reach $19.58 billion (€18.7bn). Central to these results will be the performance of Nvidia's artificial intelligence chip, Blackwell, a focal point for investors and analysts alike.
The influence of Nvidia's stock on major indexes such as the S&P 500 cannot be overstated. Last year, Nvidia singularly accounted for more than one-fifth of the S&P 500 index's total return. Its market movements are second only to Apple in terms of impact on the S&P 500 and other indexes.
As Nvidia continues to innovate and expand its reach in AI technology, analysts are closely monitoring future demand for its chips. The emergence of competitors like DeepSeek, which claims to train competitive AI models with fewer resources, adds an intriguing dimension to Nvidia's trajectory.
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