What is Nvidia and why is the software company so valuable?

Nvidia is not a household name, but not being very well-known does not hinder its success.

The stock market has done well in 2024, and one reason for the uptick is this technology company, which specializes in designing and manufacturing graphics processing units (GPUs) and related software and hardware technologies.

The Santa Clara, California-based company has seen its stock jump in value 181 percent this year, with a single stock selling for $135 in mid-June.

What makes Nvidia so valuable?

The reason for this impressive performance? The artificial intelligence boom.

As companies place greater emphasis on the potential for AI to become a vehicle for even greater profit generation, the race to expand working use cases for the technology is on. Nvidia officials say the demand for their data center platform for AI is tremendous. Their hardware has become indispensable with the surge in the use of artificial intelligence.

In May, when the company released its quarterly report for Q2, Nvidia’s founder and CEO, Jensen Huang, said that “the next industrial revolution” was underway, with “companies and countries partnering with NVIDIA to shift the trillion-dollar traditional data centers to accelerated computing and build a new type of data center—AI factories—to produce a new commodity: artificial intelligence.”

The hopeful message that resonates so much with Wall Street investors was seen in Huang’s words, who also noted that “AI will bring significant productivity gains to nearly every industry and help companies be more cost- and energy-efficient while expanding revenue opportunities.”

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, 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 for a variety of purposes. In addition to those 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 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 developing hardware and software solutions for AI, deep learning applications, and AI platforms that include AI inference and deployment solutions in various industries, including healthcare, finance, and robotics.