In 2023, NVIDIA Is Up 165%. Here’s Why It Has So Far Been The Undisputed Victor In The AI Race

This past week, Nvidia alerted investors to the reality that artificial intelligence is going to be a huge issue and a huge industry.

After the company provided “jaw-dropping” sales guidance for its AI-powered GPU processors, Nvidia shares shot up as much as 30% on Thursday, nearly doubling its market value to $200 billion.

Since the beginning of 2023, the stock has increased by 165%, and some analysts believe there is still much room for growth. On Thursday, Wall Street analysts hastened to increase their price forecasts for Nvidia, with some of them going as high as $500 per share. The share price on Friday afternoon was $388.52.

The business has changed from selling “picks and shovels” in the AI gold rush to selling video games since its beginnings 30 years ago.

The Santa Clara, California-based company is leading the pack in the AI arms race for the following reasons:

“A true visionary,” according to Ted Mortonson, tech strategist at Baird, “[CEO] Jensen Huang understood where the market was going to go, so [Nvidia] invested billions of dollars in not only silicon but software over a decade ago.” And Jensen is a true visionary since he predicted the direction of the market before it even existed.

The H-100 graphic processor unit from Nvidia, which was introduced last year, was praised by Mortonson.

The H-100 processor, which Mortonson claims has enabled “a leapfrog in training, inference, basically generative AI,” is what allowed ChatGPT to make its significant debut in November.

Nvidia not only has the best semiconductor available to support AI capabilities, but it also has the correct software and silicon stack to maintain a competitive moat around its business.

“They have the full stack of AI silicon. And those are essentially the three elements. They have the most powerful GPU, advanced networking built into the silicon, advanced memory built into the silicon, and they are now working on a new CPU, according to Mortonson.

In other words, Nvidia offers everything businesses require to realise their AI goals in a single location. Like Apple with its iPhone and iOS operating system, they have complete control over both the hardware and software aspects of their ecosystem, according to Mortonson.

“When you combine all of these elements, you get an integrated AI engine that is incredibly strong. Mortonson emphasised Nvidia’s software development of CUDA, which is well ahead of its closest rival, saying that they are years ahead of everyone else.

Morton was sure that Huang’s vision was the reason for the company’s success, likening him to other tech legends like Tesla CEO Elon Musk.

“Their vision and competence in GPUs brought them to the point where AI was essentially enabled universally across every business. “This is primarily due to Jensen’s leadership, and along with Elon, I believe he will be remembered as one of the greatest technologists of our time, Mortonson added.

“Nvidia will undoubtedly come out on top.”
According to equity analyst Angelo Zino of CFRA, Nvidia will continue to dominate the AI business due to its long history of developing GPU technology and its present dominance of the GPU data centre market.

“Nvidia will undoubtedly be the greatest winner, in our opinion. They are the ones who created GPUs, which they did in 1999. According to Zino, they hold more than 95% of the market share for GPUs in the data centre industry.

Nvidia’s GPUs are able to manage the high processing power required to run AI, but CPUs, which were primarily built by Intel and, to a lesser extent, AMD, cannot.

Huang had a vision of this eventuality, Zino claimed. “Over the years, people have realised that these GPUs have the ability to solve some of the most difficult kinds of computing problems out there,” Zino added.

The demand for GPUs, he continued, will create a sizable market for Nvidia to enter, not only for its primary businesses in gaming and data centres but also for autonomous vehicles and a variety of other technologies.

“How they work with these enterprise companies is invaluable and a big reason why we do think that they’re likely going to sustain a market share position north of 90% in the foreseeable future,” Zino said.