Recently, Nvidia once again successfully surpassed Apple to become the world's most valuable company with its outstanding performance in the field of artificial intelligence and graphics processing units (GPUs). This achievement not only reflects NVIDIA's excellent performance in the capital market, but also demonstrates its strong momentum in technological innovation and market leadership. China Exportsemi will try to analyze NVIDIA's AI chip strategy from multiple perspectives:
1. The leap in NVIDIA's market capitalization
As of November 4, 2024, Nvidia's stock price rose 1.65% to a total market capitalization of $3.38 trillion, successfully surpassing Apple and regaining the throne of the world's most valuable company. Nvidia's stock price has risen 180% so far this year, an increase that is extremely rare among technology stocks, indicating that the market has high expectations for its future development. NVIDIA's market capitalization growth is not only the result of stock price fluctuations, but also a reflection of its active grasp of opportunities in technological innovation and changes in market demand.
Figure: $3.38 trillion! Nvidia surpassed Apple to become the world's most valuable company again (the figure shows the data in June)
2. Technological innovation and market leadership
Nvidia's success can be attributed to its strong strength in the field of artificial intelligence chips. According to industry data, Nvidia has a market share of up to 80% in the AI chip market, which mainly serves the data centers of large cloud computing operators. Nvidia CEO Jensen Huang said that the company has fixed the design flaws of the Blackwell architecture chips, and expects shipments to increase by 200% to 250% in the first quarter of 2025. This strategy of rapid iteration has made NVIDIA's GPU computing power growth rate always higher than that of CPUs, thereby consolidating its dominant position in the AI chip market.
3. NVIDIA's future outlook
Nvidia's outlook for the future is also quite optimistic. The company expects revenue for the third quarter of fiscal 2025 to be $32.5 billion, plus or minus 2%, an outlook that beats analysts' consensus expectations. According to Yahoo Finance, 39 analysts on average expected Nvidia's fiscal third-quarter revenue of $31.77 billion. In addition, Nvidia's diluted earnings per share in the fiscal second quarter were $0.67, up 168% year-over-year and 12% sequentially, showing strong growth momentum. These data show that NVIDIA has strong potential for continued growth, driven by both technology and market.
4. NVIDIA's AI chip strategy
NVIDIA's AI chip strategy is an important driver of its market capitalization growth. According to Gartner, NVIDIA's market share of the global AI chip market may have reached up to 90%. This achievement is fueled by the explosive growth in demand for generative AI over the past year. In the AI acceleration chip market, NVIDIA's A100 and H100 series AI GPUs have become the market's first choice products. Research institutes predict that Nvidia plans to sell about 1.5 million to 2 million AI GPUs in 2024, a figure that could be three times its 2023 sales, further proving Nvidia's undisputed leadership in this area.
5. Market competition and challenges
Although Nvidia has a significant advantage in the field of AI chips, the market competition is also intensifying. In particular, some emerging competitors are rapidly emerging, trying to eat into this huge market with innovative technology and flexible market strategies. NVIDIA needs to continuously strengthen its technological innovation and maintain market agility to meet the challenges that may arise in the future. In addition, fluctuations in global supply chains, changes in raw material prices, and uncertainties caused by technological advancements can all have an impact on NVIDIA's business. Companies need effective risk management strategies to stay ahead of the rapidly changing market environment.
6. Conclusions
Nvidia's market capitalization surpasses Apple's, not only in recognition of its historical achievements, but also in anticipation of its future potential. With the continuous development and application of artificial intelligence technology, NVIDIA is expected to continue to promote technological innovation and lead the development of a new era of intelligent networks with its leading position in the field of AI chips. NVIDIA's success story is yet another example of the importance of technological innovation and market leadership in today's tech industry. As the company continues to expand its presence in the global technology sector, there is reason to believe that it will play an even more critical role in the future technological revolution.
In the future, NVIDIA will continue to leverage its strong R&D capabilities and market acumen to further consolidate its leadership position in the AI chip market. In this process, NVIDIA should not only pay attention to its own technological breakthroughs, but also pay attention to changes in market demand and the dynamics of competitors. Through continuous innovation and flexible strategic adjustment, NVIDIA will contribute more to the development of the global technology industry and write its own brilliant chapter.
