As the artificial intelligence boom takes off, Nvidia Corp (NVDA.O) is expected to emerge as the biggest – though not the only – winner among chipmakers after years of focusing on the technology has made it a go-to supplier for tech firms.
AI has emerged as a bright spot for investments in the tech industry, whose slowing growth has led to widespread layoffs and a cutback on experimental bets.
The surge in interest helped Nvidia report better-than-expected quarterly earnings on Wednesday and forecast sales above beat Wall Street expectations, in stark contrast to a projected loss and dividend cut from rival Intel Corp (INTC.O).
Nvidia shares rose nearly 8% in trading before the bell on Thursday. They have jumped more than 40% since the turn of the year, nearly three times the gain in the Philadelphia Semiconductor Index (.SOX).
It now has a market value of more than $500 billion, about five times that of Intel, and is the seventh-largest publicly traded U.S. firm.
The key to the company’s success is that it controls about 80% of the market for graphic processing units (GPUs), which are specialized chips that provide the kind of computing power required for services such as Microsoft-backed (MSFT.O) OpenAI’s wildly popular ChatGPT chatbot.
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