Nvidia shares opened lower on Thursday, putting its market value below $3 trillion, just one day after reaching this milestone. Despite this decline, the company remains a leader in artificial intelligence technology, although it faces increasing competition.
Nvidia shares fall on Thursday
Nvidia shares opened lower on Thursday, dropping its market value below $3 trillion. The stock price started the day at $1,240.09 per share after a strong performance on Wednesday, where it closed at $1,224.40, up 5%.
A brief moment at the top
On Wednesday, Nvidia’s stock surge briefly made it the second most valuable company in the United States, surpassing Apple. However, Thursday’s early decline put it back behind Microsoft, which remains the top company. This rally in tech stocks came as weaker U.S. economic data and lower Treasury yields fueled hopes that the Federal Reserve could cut interest rates soon.
Leading the AI ​​revolution
Nvidia has been a major player in the artificial intelligence industry, especially after OpenAI launched ChatGPT in late 2022. The company’s shares are up more than 140% this year and 200% over the past year. Over the past five years, Nvidia shares have soared more than 3,300%, far outpacing the Nasdaq’s growth of 14%, 29% and 126% in similar periods.
Announcement of new AI chips
Nvidia’s stock rally this week was partly due to an announcement from CEO Jensen Huang. At an industry event, Huang revealed that Nvidia will launch a powerful new chip, the Blackwell Ultra, in 2025. This will be followed by a new AI chip platform called Rubin in 2026, and an Ultra version of Rubin is expected in 2027.
Dominating the technology industry
Nvidia is a supplier of artificial intelligence chips and software to major technology companies such as Amazon, Google, Meta, Microsoft and Tesla. These companies use Nvidia hardware to support their AI products and services.
Solid financial performance
In the first quarter, Nvidia reported earnings of $6.12 per share and revenue of $26 billion. This was a significant jump from the previous year, with profits up 461% and revenue up 262%.
Data center revenue soars
Nvidia’s data center division saw a 427% increase in revenue year-over-year, reaching $22.6 billion and accounting for 86% of the company’s total revenue. The gaming segment, previously Nvidia’s main business, generated $2.6 billion.
Stock split and dividend increase
Nvidia announced a 10-for-1 stock split set for June 7 and a dividend increase from $0.04 per share to $0.10 per share.
Faced with the competition
While Nvidia leads in AI chips, it faces competition from AMD and Intel. AMD plans to launch new AI chips in 2024 and 2025, with another platform arriving in 2026. Intel is also pushing its Gaudi AI accelerators, which promise lower costs.
Customers become competitors
Nvidia also faces competition from its own customers. Companies like Amazon, Google and Microsoft are working to reduce their dependence on Nvidia chips to reduce costs.
Nvidia’s strong position
Despite these challenges, Nvidia remains a dominant force in the AI ​​sector and is expected to maintain its leadership position for the foreseeable future.
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