Nvidia's Stock Ascent: Will It Reach the Pinnacle?

2024 is shaping up to be a remarkable year for Nvidia, as the company is just a mere $100 billion shy of claiming the title of the world's most valuable firm, potentially ending Apple's long-standing dominance.

Although many analysts picked up on the emerging trends, Nvidia’s steep rise has taken experts, analysts, and even some officials by surprise. But what led to this remarkable turnaround? Let’s delve deeper.

A Neck to Neck Race

It was hard to picture any company taking the lead from Apple, especially after they ascended to the top, overtaking ExxonMobil in 2011. However, the landscape looks different in 2024, with fierce competition ramping up among Apple, Microsoft, and Nvidia, where Nvidia currently sits in the lead.

Apple kicked off 2024 as strong as ever, but by mid-January, Microsoft made a strategic move that left Apple trailing. The situation escalated rapidly as Microsoft pushed its valuation to a staggering $400 billion lead by March. Then, out of nowhere, Nvidia surged past both tech giants by June.

Apple still maintains the top spot with a valuation around $3.5 trillion, but Nvidia is hot on its heels, only $100 billion away from overtaking it—a feat that seems increasingly achievable, especially considering the massive 19% surge in valuation during October.

Riding the AI Wave

While numerous factors contribute to Nvidia's current surge, many experts pinpoint AI as the driving force behind this momentum. Following the explosive coverage of OpenAI and ChatGPT in 2022, Nvidia capitalized on the growing demand by providing essential technology for this modern-day gold rush, becoming a go-to resource for AI enthusiasts.

Nvidia's success is largely tied to its powerful Graphic Processing Units (GPUs), which provide unparalleled performance for developing and executing various AI applications. It's clear that any company looking to succeed in the AI sector must leverage Nvidia's cutting-edge technology.

Recently, CEO Jensen Huang proudly highlighted the 'unprecedented' demand for the Blackwell chip, indicating that major corporations like Amazon, Google, and Microsoft are all vying for Nvidia’s GPUs to gain an edge in this competitive landscape. The surge in demand has positioned Nvidia to control over 90% of the generative AI chip market, making them the clear leader. In addition, Nvidia anticipates significant revenue influx from its new Blackwell chip by year-end. Wall Street experts have reiterated their endorsements for Nvidia stocks, predicting the Blackwell chip alone could generate a remarkable $7 billion in revenue during Q4, contributing to a projected $130 billion in revenue for the 2025 fiscal year. JPMorgan pointed out that a lot of this growth is fueled by the recent surge in the semiconductor industry. Concerns about the Blackwell’s release had led some to speculate whether Nvidia was fully committed to this project. Back in August, analysts from KeyBanc even suggested that Nvidia had 'effectively scrapped' the project.

However, Nvidia managed to rectify the design issues that were hindering production of the Blackwell chip. There were initial reports that shifted the blame to Nvidia’s manufacturing partner TSMC, but Jensen Huang took responsibility for the mishap, stating that it was '100% Nvidia’s fault.'

Blackwell on the Way

The positive news for Nvidia is that they have successfully resolved the issue, and with TSMC's assistance, production is back on track. With these challenges now behind them, Nvidia's stock trajectory appears exceptionally promising.

Nvidia isn't just a leader in AI; the company is also carving out a significant presence in the metaverse and gaming. Their Omniverse platform is revolutionizing how augmented reality, extended reality, and virtual reality are utilized to craft immersive 3D environments, enhancing user experience in the metaverse.

What’s even more beneficial for Nvidia is that the growth of the metaverse translates directly into increased demand for their chips. Their outstanding performance has allowed the company to refine its GPUs, catering specifically to gamers globally, ensuring that players can fully engage with high-quality video games.

Ushering the Metaverse

It's important to recognize that Nvidia's impressive standing in the AI sphere isn't simply a case of luck; it's the result of deliberate and strategic decision-making across various aspects. Celebrating advancements such as the Blackwell chip, improvements in AR/VR, and gaming achievements, they consistently remain ahead of the game.

It will be intriguing to observe if Apple can maintain its position at the top, as Nvidia draws ever closer, especially with AI expanding its footprint across numerous industries. It’s not far-fetched to speculate that Nvidia could put an end to Apple’s long-standing 13-year supremacy.

Well-Crafted Strategy

Could Nvidia's stock reach the $200 mark? It’s entirely within the realm of possibility. The company is approximately 30% away from that figure, a target that seems attainable given Nvidia's recent performance. If this trend continues, Nvidia could not only hit but possibly exceed the $200 benchmark in the not-too-distant future.

Simultaneously, generative AI is infiltrating a variety of sectors, transforming countless companies into new Nvidia clients eager to enhance their productivity and profitability through Nvidia's cutting-edge technologies.

The $200 Milestone?

As long as AI remains a dominant force, the only real threat to Nvidia's continued success comes from another company potentially stepping up as the leading figure in the AI revolution. However, such a scenario seems unlikely in the near term. All in all, Nvidia is poised to create its own successes.

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Victoria is a journalist with a diverse portfolio focusing on technology subjects, including Web3.0, AI, and cryptocurrencies. Her in-depth experience equips her to craft articles that resonate with a broad audience.