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Nvidia Raises

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  • Nvidia’s huge surge
  • Nvidia’s competitors & AI transition

Nvidia’s extraordinary surge

Nvidia spent 24 years as a publicly traded company to achieve a valuation of $1 trillion.

Propelled by its pivotal contribution to the AI revolution, it expanded its market capitalization by an additional trillion in just eight months.

Investors are eagerly increasing their investments, believing that the semiconductor company’s stock, which has seen its value more than triple in the past year, will continue to rise.

Many are leveraging the options market to amplify their stakes in artificial intelligence, especially after a stellar earnings report propelled the stock by 17% in just two days[1].

This optimism is driven by the expectation that the company will lead the broad adoption of artificial intelligence, coupled with a fear of missing out (FOMO) among investors who have remained on the periphery as the company’s market valuation soared past the $2 trillion mark[2].

Nvidia has played a pivotal role in propelling stocks forward into 2024. The S&P 500 has set new records recently, with a 6.8%[3] increase, marking the second-strongest start to a year in the last decade, only behind the 11% rise in 2019[4].

Source: Yahoo Finance

Similarly, the Nasdaq has risen by 6.1%[5] this year. This surge is partly due to Nvidia, which added nearly $300 billion in market value since its earnings report last week.

Is there any significant competition for Nvidia?

Nvidia dominates approximately 80%[6] of the AI data center accelerator market, serving major platforms like Amazon’s AWS, Alphabet’s Google Cloud, and Microsoft’s Azure. Despite these companies attempting to develop their own chips and the presence of competing solutions from other semiconductor firms like Advanced Micro Devices and Intel, none have yet significantly impacted Nvidia in the AI accelerator space.

Intel and Advanced Micro Devices have stepped up their game in the AI chip market. Major tech giants such as Amazon, Google, and Microsoft, which are significant purchasers of Nvidia’s AI-training chips, are either already equipped with or are in the process of creating their proprietary chip designs.

Nvidia’s AI transition

The CEO of Nvidia has successfully transitioned the company’s focus from computer graphics to developing semiconductor designs crucial for training AI systems. This strategic pivot has made their chips indispensable to major technology firms, including Microsoft and Tesla.

Nvidia’s position as a pioneer in AI, having initiated investments in the technology over ten years ago, has solidified its standing in the industry, making it challenging for competitors to overtake.

This advantage is largely due to its early focus on software development. Nvidia has produced extensive software designed explicitly for sectors such as healthcare and robotics, which are critical areas of AI application.

The software tools Nvidia developed to maximize the performance of its chips have set a benchmark across the industry.

 

 

Investors can long Nvidia using our 2x NVIDIA, 3x NVIDIA.

Alternatively, investors can short Nvidia using our -1x NVIDIA, -3x NVIDIA.

 


Footnotes:
  1. Tradingview.com
  2. Tradingview.com
  3. WSJ.com
  4. Koyfin.com
  5. Tradingview.com
  6. WSJ.com

Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.

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Violeta Todorova

Senior Research

Violeta è entrata a far parte di Leverage Shares nel settembre 2022. È responsabile dello svolgimento di analisi tecniche e ricerche macroeconomiche ed azionarie, fornendo pregiate informazioni per aiutare a definire le strategie di investimento per i clienti.

Prima di cominciare con LS, Violeta ha lavorato presso diverse società di investimento di alto profilo in Australia, come Tollhurst e Morgans Financial, dove ha trascorso gli ultimi 12 anni della sua carriera.

Violeta è un tecnico di mercato certificato dall’Australian Technical Analysts Association e ha conseguito un diploma post-laurea in finanza applicata e investimenti presso Kaplan Professional (FINSIA), Australia, dove è stata docente per diversi anni.

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Oktay ha conseguito una laurea in Finanza e contabilità ed un certificato post-laurea in Imprenditoria presso il Babson College. Ha ottenuto anche la certificazione CFA.

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