Like Carlos Alcaraz at Wimbledon this year, Nvidia’s recent performance has launched it into household name status.
What happened: Shares of chipmaker Nvidia are up almost 11% on the week, after reports the company had doubled its revenue from a year ago while riding the wave of the AI hype. Nvidia’s technology is an essential component of ChatGPT, and other similar chatbots.
- Nvidia is perhaps the single-biggest winner of the AI boom, as it essentially has a monopoly on the processing chips used to power high-tech generative AI.
- This year, the company became the sixth name ever to be valued at US$1 trillion, and is now projecting growth that surpasses even the most bullish analyst estimates.
Yes, but: Nvidia faces some potential challenges ahead...
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Analysts have questioned whether the company can even meet soaring demand (which is way outstripping supply).
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Fears abound that the US will enact legislation that would effectively ban chip exports to China, a major Nvidia customer.
Why it matters: Because of Nvidia’s massive footprint across AI tools, some experts see the company as a bellwether for the sector. Its success proves the AI frenzy isn’t just empty hype, but that many companies are pouring money into preparing for the AI future.—QH