Chipmaker Nvidia’s journey of becoming world’s 3rd largest company

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Yash Vora

3/10/20242 min read

Wall Street had an optimistic view of artificial intelligence, which can reshape the technology industry. Nvidia, which controls the majority of the market for graphic chips used to power AI applications, affirmed this by making significant progress.

Nvidia Corporation is an American multinational corporation and a technology company headquartered in Santa Clara, California. Jensen Huang created it on the 5th of April 1993. Nvidia's product line is diverse, including graphics processing units, application programming interfaces, and system-on-chip units for mobile computing. It is also a prominent supplier of AI hardware and software.

Talking about Nvidia’s humongous growth since its inception, a few crucial elements play a major role in its success. First off, the company's strategy of numerous stock splits—which caused a single share to multiply 48 times—was the culmination of its aim to be accessible to a wide variety of investors. This demonstrated the business's sound financial standing and promising future. The expansion of the GPU market and notable advancements in AI are credited with Nvidia's domination. Before entering the AI, Nvidia was known in a less lucrative market, that is the gaming computers, where they supplied graphic processors to PC makers.

Back in September 2023, the US chipmaker partnered with the company that has the highest customer base and the largest in India by market capitalization, Reliance Industries, for the creation of a Large Language Model (LLM). It is an artificial intelligence algorithm, that will receive instruction in a variety of varied Indic languages spoken by the 1.4 billion people living in the nation. This move also acted as a drive towards their journey.

Nvidia's market capitalization rose to US $1.96 trillion on February 22 from US $1.52 trillion in January 2024. Before this, however, on February 14, 2024, Nvidia overtook Google, which had a market value of US $ 1.82 trillion, by rising to US $1.83 trillion. This put Google's parent corporation Alpha in the rear. Just one day prior, Nvidia had even outperformed Amazon in that regard. An additional contributing cause to its expansion was the 58.5% rise in share price it saw in 2024. Nvidia planned to use the capital expenditure that the leading cloud computing companies were allocating for artificial intelligence training, which was one of the reasons behind this.


Nvidia became the third most valuable corporation in the world on Friday, March 1, when it closed at US $2.06 trillion, breaking both the US $2 trillion barrier and Aramco's US $2.03 trillion valuation. This year Nvidia’s stock price has rallied, which resembles why it has 80% control of the high-end AI-chip market.

Among the businesses in which Nvidia had invested were Arm Holdings, a chip designer; Recursion Pharmaceuticals, a biotech company; and Nano X-imaging, a company that analyzed data using artificial intelligence software. These companies' connection to Nvidia contributed significantly to the high percentage increase in their share price.


The business's perseverance and dedication are demonstrated by its rise from a single share to the third-largest company in the world based on market values and a vision to deliver shareholder value.


Thank you.

Regards,

Devansh Sheth,

Kautilya, IBS Mumbai.

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