Rapid growth

The trading session on June 18 on the New York market (early morning of June 19, Vietnam time) recorded a "historic event" when the American chip manufacturer Nvidia officially surpassed Microsoft and Apple, becoming the most valuable company in the world .

This development was very fast, breaking the forecasts of most organizations and even the most optimistic experts.

Nvidia has only really become widely known in the past year or so, since the "storm" of artificial intelligence (AI) technology exploded when OpenAI launched ChatGPT in late 2022. This is also a business with a rare rapid increase in capitalization on a global scale.

Since the beginning of 2023, Nvidia shares have increased about 9.5 times, from the threshold of 14 USD/share to the historical peak of 135.6 USD/share at the end of the session on June 18. Nvidia's capitalization has also increased that many times, to 3,340 billion USD, the highest among all listed companies on the global stock market.

With its current capitalization, Nvidia surpasses Microsoft (at 3,320 billion USD as of the end of the session on June 18) and Apple (3,290 billion USD).

Nvidia's stock price surged, helping Nvidia Chairman and CEO Jensen Huang's fortune soar to $117 billion, ranking 11th in the list of the world's richest billionaires.

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Nvidia Chairman and CEO Jensen Huang has a fortune of 117 billion USD, the 11th richest person in the world. Photo: WCC

It can be seen that Nvidia's breakthrough is unprecedentedly spectacular. Billionaire Jensen Huang's company has far surpassed famous names in the world's chip technology industry such as Intel.

As of the end of the session on June 18, Intel's capitalization reached 130.4 billion USD, less than 4% of Nvidia's capitalization.

If it took Apple 43 years to reach a market capitalization of one trillion USD, then it took Tim Cook's company only 2 years to double its size, reaching the threshold of 2 trillion USD in 2020. In August 2020, Apple became the first American company to reach a market capitalization of 2 trillion USD, even though 5 months earlier, the capitalization of this American company fell below 1 trillion USD.

The growth rate of technology companies in recent years has been very fast. The stock prices of giants such as Apple, Microsoft, Alphabet, Google and Facebook have skyrocketed.

As for Nvidia, the growth is even faster, far surpassing the above giants.

Bubble or not?

While Apple and Microsoft grew thanks to traditional technology products, Nvidia broke through thanks to the wave of artificial intelligence (AI).

Nvidia was founded in 1991. For the first few decades, it was primarily a hardware company that sold chips to gamers to run 3D games. But since late 2022, Nvidia has been on the rise thanks to the AI ​​craze after OpenAI launched ChatGPT. The AI ​​craze has spread globally, and the whole world knows that OpenAI develops generative AI technology based on Nvidia's graphics chips.

With the current growth rate, many forecasts say that Nvidia will become the first company in the world to reach the threshold of 10,000 billion USD. A few years ago, this was hard to imagine, but now, many organizations and experts around the world believe in this possibility.

That also means Nvidia stock will continue to rise and rise strongly in the coming years.

The question is whether Nvidia will continue to rise or has it entered a bubble, like Cisco Systems stock during the Dot Com bubble in 2000?

Sharing on his personal page, expert Adam Khoo said that this possibility is unlikely, Nvidia shares may not have peaked yet. According to the famous Singaporean expert, Cisco Systems shares increased 4.7 times in the period 1998-2000. At that time, this stock had a price-to-earnings (P/E) ratio of 200 times.

Right now, Nvidia's P/E is much lower. Nvidia's future P/E through early 2025 is only a few dozen times.

What is of concern is that Nvidia's graphics processing units (GPUs) containing chips (used for supercomputers that build platforms for AI) have an almost absolute monopoly, with up to 80% market share worldwide. The products of the American technology giant are currently not enough to supply the market.

According to experts, Nvidia is really a huge money-making machine at the moment. The company's first-quarter revenue increased nearly 3.7 times compared to the same period last year, while profits increased 8.7 times, to $12.3 billion.

Nvidia's prospects are still considered very strong thanks to the potential of its chips for AI.

Nvidia CEO Jensen Huang said the era of AI factories is near. It is an advanced data center for developers to build high-performance AI applications for various industries.

Nvidia is seen as the company at the center of the world's AI revolution. The company has established a hardware and software ecosystem that forms the foundation for computers, servers; other new products are also being deployed by the world's largest data center operators, including Amazon.com, Microsoft, Google.

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