New York (AP) – The Superstar race for Nvidia’s actions in recent years has been surprising. It was the same with the fall on Monday, which made $ 595 billion disappear. It’s about as much as Pepsico, McDonalds, Starbucks and Target are worth, combined.
Especially known only in play and crypto circles a few years ago, Nvidia burst into Zeitgeist after seeing her sales thrust because customers wanted his chips to form their chatbots and other intelligence products artificial.
Nvidia became a familiar name because its stock more than tripled in 2023, then more than doubled in 2024. Investors and analysts praised CEO Jensen Huang as the “AI godfather”. Nvidia has become a giant of $ 3,000 billion and exchanged places with Titans like Apple to become the most precious company in Wall Street.
But all of this stopped on Monday, at least for a moment, after a Chinese element called Deepseek said that he had developed a large language model that could work as chatgpt and other American rivals, but using much less of calculation power.
Here is an overview of how it all happened to this point:
How has it become a darling?
Nvidia’s roots started in the game.
The invention of the technological company based in Santa Clara, California, the invention of the graphic processor unit, or GPU, helped in 1999 to trigger the growth of the PC game market and redefined the infographic. From now on, Nvidia’s specialized fleas are key components that help feed different forms of artificial intelligence, including the latest generative AI chatbots such as Chatgpt and Google’s Gemini.
Huang has nicknamed the AI ”the next industrial revolution” and the GPUs of Nvidia are designed to perform artificial intelligence tasks faster and more effectively than chips for general use such as CPUs. Technology giants slam Nvidia fleas as they go deeper into AI – a movement that allows cars to drive by themselves and generate stories, art and music.
The demand helped Nvidia’s income to increase by breathtaking levels, a quarter after the quarter. On February 23, 2023, after Nvidia shone the expectations of the former analysts in matters of quarterly profit, Huang said that “AI is at a inflection point, preparing for a large adoption reaching each industry.” The quarterly revenues of the company at the time were $ 6.05 billion.
This increased up to $ 7.19 billion three months later, then almost doubled at $ 13.51 billion three months after that. Revenues have since vauled $ 35.08 billion in the three months until October 2024.
The company’s share price has also soaked, and its total market value quickly adopted competitors like Intel, Microsoft and others. Nvidia alone represented more than a fifth of all the total yields of the S&P 500 index last year. No other stock got closer and he had more than the impact of Triple Apple.
Buy an Indication fund of the S&P 500 today, and almost 6 cents on each $ 1 will only be done in Nvidia. This leaves 94 cents for all 499 other companies.
Is it always a darling?
Unlike the Dot-Com Boom, the real money was behind Nvidia’s overvoltage, and its stock market course increased on expectations more and more to come. These expectations were questioned on Monday.
Deepseek and its apparently at a lower cost operations have raised concerns about whether companies need to spend as many dollars for Nvidia fleas as it previously thought it. The concerns have led to actions through the AI industry, including suppliers of the flea industry and electricity companies hoping to electrify the vast data centers that were to be built to manage these chips. But Nvidia was under the spotlight because her stock became the brightest symbol of the Bonanza AI.
Some in Wall Street saw almost 17% of 17% on Monday for Nvidia’s stock as an opportunity rather than a signal of pending misfortune, saying that the stock had become more affordable. If AI becomes cheaper to execute, this could open the door to new types of customers and software innovations that could ultimately help the long -term industry.
“Regarding Nvidia herself, this is not the first time that a great technological action has faced existential questions,” said John Belton, portfolio director at Gabelli Funds. “We have seen similar situations with Microsoft, Apple, Meta, Google, Amazon and Netflix – companies that were once doubted but ultimately plump.”
The entry of Deepseek certainly adds uncertainty to the entire ECO ecosystem, but that does not change the crushing momentum behind the movement, according to Brian Colallo, strategist in Morningstar.
“We believe that GPU’s demand is still going beyond supply,” he wrote in a report. “Thus, although thinner models can allow greater development for the same number of chips, we always think that technological companies will continue to buy all GPUs they can in the context of this” rush to the gold “.
For its part, Nvidia’s actions oscillated between the gains and the losses early Tuesday after its worst dive from the 2020 covid crash, then rallied a little and ended the day almost 9% higher.