Nvidia envy
The AI boom has propelled Nvidia to become the sixth most-valuable company in the world. Its chipmaker rivals want a bigger piece of the action.
Warren Buffett famously observed that capitalism is a system where every time you build an economic castle, someone else is going to come after it. It’s especially relevant today for US chipmaker Nvidia, which has built the sixth-biggest castle in the world off the back of the AI boom.
Insatiable demand for Nvidia's chips pumped its quarterly revenue up 265% from a year earlier to USD22 billion ($33 billion), according to its Q4 earnings report released Thursday, with net income up 765% to USD12.3 billion. Wall Street enthusiasm pushed the stock 11% higher in after-hours trading, bringing its market cap to about USD1.75 trillion.
“I’ve been an investment analyst for 30-plus years,” said Sydney-based fund manager Alex Pollak, whose Loftus Peak fund holds a position in Nvidia, “and I’ve never seen a company with $20 billion in sales double and redouble in the space of two years. That is unheard of growth.”
Historically a maker of graphical processing units (GPUs) for video game hardware, Nvidia’s star performer is its H100 GPU. When it was released last March, Nvidia's revenue from data centres, where AI magic happens, was roughly at parity with its video game business. Fuelled by the H100, data centre revenue is up 500% since then, becoming far and away the company’s most profitable segment.
