The processor specialist Nvidia took off more than 20% Thursday on the New York Stock Exchange, the day after the publication of very ambitious forecasts, based on the boom of artificial intelligence. Around 15:30 GMT, the title of the Santa Clara group (California) took 27.50%, which allowed Nvidia to approach the trillion dollars of market capitalization, a very closed circle that has only five members for the moment, including four American technology flagships.
If the gain was confirmed at the close, Nvidia would have earned, in one session, more than $ 200 billion in value, more than the total market capitalization of Nike, Netflix or Disney. Founded thirty years ago by Taiwanese-American engineer Jen-Hsun "Jensen" Huang, this company little known to the general public initially saw its future in video games. It has developed graphics processors (GPUs) to improve image quality for gamers.
These chips have a computing capacity much higher than that of a conventional computer, a potential that quickly interested developers of artificial intelligence (AI), which is demanding in data processing. Some of these GPUs cost tens of thousands of dollars each. On Wednesday, after trading, Nvidia reported results above expectations but especially published an astronomical forecast for its revenue in the second quarter, which would represent an increase of 64% compared to the same quarter of 2022.
During the conference call to present the results, Jensen Huang explained that the world of data centers, essential to remote computing (cloud), is beginning a major transition and technological upgrade, in particular to cope with the new requirements of AI. The executive estimated that the investments to be made could reach a trillion dollars in the coming years, of which Nvidia intends to capture a significant part.
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The AI revolution
Nvidia's products and services "are uniquely positioned to help transform data centers," Bank of America analyst Vivek Arya said in a note. "We have competition in all directions," Huang acknowledged, but "we are the cheapest solution" for companies that want to improve their data processing capabilities.
Nvidia does not just sell processors and offers to design and build "data centers" from scratch, says the emblematic boss of the group, known for his casual look and taste for leather jackets. The Californian group is among the best placed to take advantage of the current craze for so-called generative AI, that is to say able to create content without human intervention on request in everyday language, thanks to large databases.
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In 22 years of coverage of the technology sector and large caps, we have never seen a forecast of this magnitude, which confirms that the monetization of AI (...) is well underway, "commented analysts Wedbush Securites, in a note. The group is also benefiting from the ongoing revolution in driver assistance and autonomous driving, a segment in which it more than doubled its revenues in the first quarter.
Nvidia's enthusiasm contrasts with the rhetoric of major semiconductor manufacturers, who are talking about a slowdown in the market this year, mainly due to lower demand for personal computers. This trend has significantly reduced Nvidia's video game revenues (-38%), but the growth in the data center business is such that it compensates for this deceleration. For Wedbush, the company's results and forecasts are a message to "investors who alert on an AI bubble", and compare the current vogue of artificial intelligence with crypto waves or metaverses. "The fourth industrial revolution is coming, with AI.
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