Nvidia’s market price has risen to the company’s all-time high value of $3 trillion, going head to head with big tech companies like Apple and Microsoft. The company’s rapid growth rate is hugely driven by the potential it holds for the future rather than its current performance in the market. Nvidia still falls slightly behind Apple and Microsoft in terms of the current valuation despite growing its earnings at a faster rate than the latter. Even so, with billionaire Jensen Huang in charge of the company as the CEO, Nvidia has a very clear vision and aims to become a leader in the world of artificial intelligence and computing.
Nvidia’s profit margins
Nvidia is already making a lot of money from its chips, so it can definitely compete in the big leagues without facing any challenges. The company’s net income over the last year was $53 billion, this amount is not that much far behind what Apple achieved ($102 billion) and the $88 billion earned by Microsoft. Nvidia’s revenue over its last four fiscal quarters of $96.3 billion may only represent a quarter of what Apple Inc earned and less than half of Microsoft’s earnings, but the company’s ability to turn sales into profits is said to be exceptional and the best out there. This is shown by Nvidia’s gross margin of 75%, which is much higher than that of Apple’s 46% and even beats out Microsoft’s 70% margin. These gross margins reflect just how much the market is ready to pay for Nvidia’s chip technology as well as the high demand for its products.
Nvidia is one of the fastest if not the fastest growing company
Nvidia is genuinely one of the fastest growing companies in terms of market revenue and profits. The company’s revenue has increased by 195% over the past year to surpass Microsoft’s and Apple’s modest growth rates of 16% and 0.4% respectively. This swift rise in growth is mainly attested to the increasing demand of Nvidia’s chips, which are essential and much needed for their AI capabilities. Nvidia’s GPUs, robotics, and chip systems have become completely indispensable as more and more tech companies keep relying on artificial intelligence. The chip maker shows zero signs of slowing down anytime soon, Nvidia is in a better market position than ever and further expects its revenue to increase by an additional 80% in this current quarter.
A vision paved with AI ambitions
Nvidia’s market valuation is based on its stance in the artificial intelligence space, despite being so speculative of what the company could achieve in the future. The company’s GPU chips are the vital elements to the development of AI technologies since they are the ‘engines’ of high performance computing. Nvidia is at the forefront of receiving artificial intelligence investments made by both the US government and major tech corporations, which might even include Apple and Microsoft at some point in time.
The chip company is now ready and well prepared to provide the necessary tools required to realize the full potential of its general processing unit (GPU) chips. But the main question remains as to whether Nvidia can sustain its growth and how far the ‘superchips’ can push the company. Nvidia’s role in the future of tech is not just expected but almost guaranteed since most companies in the US, Asia, and Europe are preparing for an AI driven future.
Nvidia’s recent rise is a warning that the chip maker is just getting started. The company is ready to completely transform tech applications all over the world but this time with a better focus on artificial intelligence. It’s just the beginning of Nvidia’s way to the top, only time will tell how much Jensen Huang’s company will achieve in the near future.
References; [https://www.statista.com/chart/32475/nvidia-compared-to-apple-and-microsoft/]
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