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Tuesday, July 23, 2024

Nvidia’s Stock Market Value Is up $1 Trillion in 2024. How It Rose to AI Prominence, by the Numbers

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(AP) – Nvidia’s stock price has jumped 92% this year as of Wednesday, increasing the company’s market value by more than $1 trillion. Those numbers are headed higher again Thursday after the company reported better-than-expected quarterly results.

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The chipmaker has seen soaring demand for its semiconductors, which are used to power artificial intelligence, or AI applications. The company’s revenue more than tripled in the latest quarter from the same period a year earlier.

It’s the latest sign that the excitement surrounding artificial intelligence likely won’t subside anytime soon. Nvidia, which has positioned itself as one of the most prominent players in AI, has been producing some eye-popping numbers. Here’s a look:

$1.152 trillion
The amount Nvidia Corp.’s market value has increased so far this year as of May 22, according to FactSet. In other words, Nvidia’s year-to-date gain is almost equal to the market value of Facebook and Instagram parent Meta Platforms. In all, just six of the 500 companies in the S&P 500 have market caps above $1.152 billion, including Nvidia.

$2.374 Trillion
Nvidia’s total market value as of the close of trading Wednesday. Earlier this year, it passed Amazon and Alphabet to become the third most valuable public company, behind Microsoft ($3.2 trillion) and Apple ($2.927 trillion). The company was valued at around $418 billion two years ago.

Nvidia’s price at the opening of trading Thursday, making it just the ninth company in the S&P 500 with a share price over $1,000 (which sounds more notable than it is.) That will soon change however. On Wednesday, Nvidia announced that it plans a 10-for-1 stock split, meaning there will be 10 times more shares outstanding, but the price of each will be closer to $100 each. The company said the split, effective after markets close on June 7, will make its shares more accessible to employees and investors.

$26 billion
Revenue for Nvidia’s most recent fiscal quarter. That’s more than triple the $7.2 billion it reported in the same period a year ago. Wall Street expects Nvidia to bring in revenue of $117 billion in fiscal 2025, which would be close to double its revenue in 2024 and more than four times its receipts the year before that.

Nvidia’s estimated net margin, or the percentage of revenue that gets turned in profit. Looked at another way, about 53 cents of every $1 in revenue Nvidia took in last year went to its bottom line. By comparison, Apple’s net margin was 26.3% in its most recent quarter and Microsoft’s was 36.4%. Both those companies have significantly higher revenue than Nvidia, however.

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