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In the high demand for AI, recently, NVIDIA's stock experienced a massive increase. NVIDIA's share has risen 186% over January 2024 and 9X since the beginning of 2023.
There are many reasons behind the uprising of NVIDIA stock. Nvidia has capitalized on partnerships with major tech companies like Tesla that rely on its hardware for advanced AI tasks, like natural language processing and autonomous systems.
In 2022, Tesla invented its chip, but other alliances have expanded Nvidia's market as companies prioritize investing in high-performance computing solutions to support growing AI workloads.
As a result, investors view Nvidia as a primary player in the AI industry, leading to increased stock valuations and high price targets from analysts.
Recently, the use of AI has increased, and that's the rise in the demand for NVIDIA's GPUs. According to NVIDIA CEO Jensen Huang, their next generation's Blackwell GPU got higher demand.
Nvidia's stock also saw significant growth in 2023 due to the higher demand for its specialized GPUs. The company's products, such as the Hopper GPUs, are crucial in AI and data centre applications, driving substantial revenue growth.
Nvidia's revenue nearly doubled in 2023 compared to 2022, reaching around 60 billion USD. This positive financial performance is a testament to the company's strong position in the market.
The future of NVIDIA is so bright. In 2019, the price of the share of NVIDIA was just 100 USD. Now, in 2024, it turn into 2900 USD. That means, in 5 years, Its price increased by 2800% and gained a 93% index jump.
Now, Nvidia believes that the next-generation AI models will likely require 10 to 20 times more computing power, suggesting that the demand for its data-center GPUs could keep growing in the long run.
According to one estimate, the AI chip market could generate $311 billion in annual revenue in 2029 compared to this year's estimate of $123 billion.
In the data centre sector, which increases by 154% yearly, revenue of $26.3 dramatically benefits from the robust demand for NVIDIA's GPUs. Customers have continued to purchase Nvidia's Hopper architecture-based GPUs even though the company is set to begin the production ramp of its next-generation Blackwell chips in the next quarter.
NVIDIA expects 52% annual earnings growth for the next 5 years. That means it will go for a jump in the index in the next few years. If the current situation continues, it will hit 5 times more prominent in the next five years. And investors will get richer this way.
It is also true that it now stands many times bigger in value. But it may not be smooth like it is now in the future. This sector will be saturated, and the demand for CPUs will be no different from the same. However, according to the current context, NVIDIA stock is doing well. The possibility of bursting this bubble is very low shortly.