U.S. Stocks: NVIDIA Shares Surge

In March, the U.S. CPI increased by 3.5% year-over-year, marking the highest level since September 2023 and exceeding market expectations; the core CPI rose by 3.8%, also surpassing the expected 3.7%. Persistent inflation has crushed hopes for interest rate cuts. Following the release of this data, U.S. bond yields rose rapidly. Although U.S. stocks have been volatile recently, it is not due to a deterioration of fundamentals but rather due to fluctuations in market expectations for rate cuts.

Data shows that on April 10, 2024, all three major U.S. stock indices closed lower, with the Dow Jones Industrial Average down 1.09%, the S&P 500 down 0.95%, and the Nasdaq down 0.84%. However, in terms of individual stocks, NVIDIA bucked the trend and closed higher.

NVIDIA Corporation was registered in California in April 1993 and re-registered in Delaware in April 1998. The company pioneered accelerated computing, helping to solve the most challenging computational problems. NVIDIA operates two main businesses—GPUs and Tegra processors—based on a single underlying architecture. NVIDIA employs a platform strategy, integrating hardware, system software, programmable algorithms, libraries, systems, and services to create unique value for the markets it serves.

Performance Growth

On February 23, NVIDIA announced fourth-quarter revenue of $22.1 billion, a 265% increase over the same period last year. Its founder and CEO Jensen Huang attributed this growth to a surge in global demand for accelerated computing and generative AI. He also noted that Nvidia RTX, launched less than six years ago, has become a major PC native AI platform, favored by 100 million gamers and creators.

As enterprises and individual users increasingly recognize the efficiency improvements AI offers, AI technology is expected to be widely adopted across global economies and markets soon. Companies dedicated to building AI software development ecosystems, such as cloud giants, are likely to see their stock prices and performance soar. AI software refers to systems capable of performing tasks that typically require human-like intelligence, including understanding, learning, judgment, and language translation.

Due to the rapid development of AI concepts, excitement about AI only continues to grow, leading to positive advancements in both hardware and software, thus significantly boosting NVIDIA’s profits. AI is highly favored by investors, and NVIDIA has not disappointed, making it a hotspot in AI.

NVIDIA (NVDA.US), known as the “king of computing power” and a leader in AI chips, plays a crucial role in global AI data centers. It possesses numerous computing cores capable of performing massive matrix operations and excels at parallel computing. NVIDIA’s AI GPUs have become central hardware in the AI field in recent years.

AI Hardware Deployment Entering an Optimal Phase: NVIDIA AI GPU Delivery Times Significantly Reduced

The epoch-making generative AI—ChatGPT—suggests that human society is gradually entering a new AI era. Since then, not only the technology industry but industries worldwide have seen a sharp increase in demand for NVIDIA AI chips, specifically for AI training/inference areas using A100/H100 AI GPUs.

According to data, on April 10, 2024, semiconductor product company NVIDIA (NVDA) had a turnover of $37.331 billion, ranking first in the U.S. stock market that day. NVIDIA’s stock rose 1.97% to $870.39 on April 10, 2024, despite a 2.16% decline over the past five trading days and a 3.67% decline throughout April. From the beginning of the year to date, the stock has risen by 75.76%, and over the past 52 weeks, it has surged by 220.36%. NVIDIA’s stock price has soared over 200% from $236.64 at the beginning of 2023.

Competition Approaches

While NVIDIA faces threats from Google, Google’s processors are not enough to challenge NVIDIA’s dominance. Google recently launched its server CPU Axion based on Arm, while NVIDIA has its own server CPU Grace, and reports indicate that NVIDIA will not sell its CPU to Google. Thus, Google’s new product does not impact NVIDIA, making it an insufficient competitor.

NVIDIA recognized early on the potential of GPUs in AI and deep learning, hence it invested heavily in related R&D and successfully built a robust software and hardware ecosystem around its GPU hardware. NVIDIA has been deeply involved in the global high-performance computing field for years, particularly with its CUDA computing platform, which is the preferred system for AI training/inference and other high-performance computing tasks. NVIDIA’s currently most popular H100/H200 AI GPUs, based on NVIDIA’s breakthrough Hopper GPU architecture, provide unprecedented computing power, especially in floating-point operations, tensor core performance, and specific acceleration in AI training/inference areas.

Chip manufacturers’ capacity expansion has driven a significant increase in the supply of NVIDIA’s AI GPUs,

thus gradually improving the scale of AI hardware deployments by major enterprises, including cloud giants like Amazon and Microsoft, and software giants like Meta, which are stabilizing their demand for AI GPUs.

NVIDIA has become a dominant player in this field, clearly representing a thriving entity. Even amid stock market fluctuations, its development pace does not seem to slow significantly. Despite cautious tones from IDAD fund portfolio manager Andrew Mericks regarding individual stock selection—who suggests NVIDIA might be a bubble—this view seems overly definitive. Although its valuation was under $100 billion four years ago, it’s undeniable that NVIDIA’s stock has risen by 225% over the past 12 months and by 1,595% over five years, marking an astonishing rate of development. NVIDIA has indisputably become a leader in producing chips capable of executing complex AI tasks and is expected to perform strongly in the coming years. Both enterprises and individuals are gradually tasting the benefits of AI, making anything related to AI a good long-term investment.

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