Chart: Nvidia’s AI-Fueled Stock Market Rally

There’s a meme currently making the rounds on the internet that perfectly explains Nvidia’s meteoric rise from just another chipmaker to the third most valuable company in the world. The meme shows three gold diggers – Microsoft, Alphabet and Meta – and a fourth person selling shovels – Nvidia. “When everyone digs for gold, sell shovels,” the tagline reads, meaning that Nvidia’s chips are the shovels in the AI gold rush we’re currently witnessing.

Ever since Nvidia’s CEO Jensen Huang first revealed how much he expects his company to profit from the AI hype in May 2023, Nvidia’s share price has known only one way: up. “A trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process,” Huang said back then, and Nvidia makes the chips that power said transition. That day the company reported $7.19 billion in revenue for the first fiscal quarter of 2024. 12 months later, it reported $26 billion in revenue, an increase of 262 percent.

Since May 22, 2023, the day that Nvidia’s success really took off, the company’s share price is up 277 percent, bringing the chipmaker’s market cap to $2.8 trillion.