What is Nvidia and why is its stock surging so much?
Nvidia is not the most well-known brand, but its lack of popularity does not diminish its resounding success. Why is Wall Street in love with this company?
Nvidia is not a household name, but not being very well-known does not get in the way of its success.
The stock market has done well in 2023, and one reason for the uptick is this technology company that specializes in designing and manufacturing graphics processing units (GPUs), as well as related software and hardware technologies.
The Santa Clara, California based company has jumped 222% this year as a result of spectacular sales. It recorded year-over-year sales growth of 101% to $13.5 billion for the three months ending in July, which was a new high for Nvidia.
They are expecting to generate even more revenue in the third quarter, with projections pegged at $16 billion.
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Why is Nvidia stock surging so much?
The reason for this impressive performance? The artificial intelligence boom. Nvidia officials say demand for their data center platform for AI is tremendous. Their hardware has become indispensable with the surge in the use of artificial intelligence.
“A new computing era has begun. Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI,” according to Jensen Huang, founder and CEO of NVIDIA.
“During the quarter, major cloud service providers announced massive NVIDIA AI infrastructures. Leading enterprise IT system and software providers announced partnerships to bring NVIDIA AI to every industry. The race is on to adopt generative AI,” he said.
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What is Nvidia?
Founded in 1993 by Jensen Huang, Chris Malachowsky, and Curtis Priem, Nvidia has become a prominent player in the computer hardware industry, particularly in the realm of graphics and high-performance computing.
Nvidia’s primary product line is its GPUs, which are widely used for rendering graphics in video games, artificial intelligence research, and other computationally intensive tasks.
Nvidia’s GPUs are known for their parallel processing capabilities, making them well-suited for tasks that require handling massive amounts of data simultaneously.
The tech company has developed GPUs that are geared towards a variety of purposes. Aside from those that are designed primarily for gaming, they also have a line of professional GPUs optimized for use in industries such as graphic design, animation, film production, and scientific visualization.
They also produce GPUs specifically designed for high-performance computing and scientific research, often used in data centers for tasks like AI training, machine learning, and simulations.
Nvidia has been a leader in the development of hardware and software solutions for AI and deep learning applications, and AI platforms that include solutions for AI inference and deployment in various industries, including healthcare, finance, and robotics.