Nvidia, how did the chip maker break through the 1 trillion mark?

Nvidia enters the trillion dollar club. The American chip maker has crossed the threshold of 1 trillion dollars of capitalization on Wall Street after gaining 180% since the beginning of 2023. In numerical terms, the shares of the Californian company have gone from 178 to 383 dollars in the space of six months on the wave of enthusiasm aroused by ChatGpt and other evolutions of artificial intelligence.

Nvidia provides the infrastructure for AI. Its high-power chips are in fact necessary to power systems capable of generating text and images by imitating human capabilities. Technology is now at the top of the agenda of all large companies, digital and otherwise, who are rushing to launch alternative products to ChatGpt or based on OpenAI programs-

Hence the explosion in demand for semiconductors manufactured by Nvidia which a few weeks ago expected to close the May-July quarter with 11 billion dollars in revenues. The number is 50% higher than previous market expectations, in what Morgan Stanley has called “the largest upward revision of revenue estimates in business history”.

Emphasis aside, it is clear that Nvidia is at the center of the possible industrial revolution induced by AI from which other chip companies will also benefit, especially if they specialize in cutting-edge ones. Proof of this is the rise on the stock market of other sector giants such as Amd (+89%), Tsmc (+25%), Samsung (+30%) and Stmicroelectronics (+24%).

However, Nvidia is currently in an advantage over its competitors, as evidenced by the recent long-term agreements signed with the Wpp advertising agency, the Japanese telecommunications giant Softbank and the launch of a new supercomputer. A series of positive news that pushed the stock to gain 50% in one month, making Nvidia reach the 1 trillion dollar capitalization, today boasted only by Amazon, Apple, Microsoft and Alphabet-Google.

What could go wrong? All. Just as Nvidia reached 1 trillion dollars on Wall Street, in fact, a group of 350 scientists and entrepreneurs warned that “mitigating the risk of extinction brought about by artificial intelligence should be a global priority on a par with other existential dangers to the society such as pandemics or nuclear war”.

Among the signatories of the appeal there is also Sam Altman, founder of OpenAI, the developer of OpenAI. His warning appears contradictory to the position taken by OpenAI itself regarding the regulation being studied by the European Union. Altman himself recently threatened to leave Europe if the legislation is not compatible with ChatGpt’s industrial plans.