Nvidia CEO Jensen Huang's net worth has risen by $22 billion year-to-date as the semiconductor company's stock has soared.
Wall Street investors have been rewarded for their patience as Nvidia and other tech companies rebounded from a slump. Nvidia's shares in the past six months have more than doubled and increased by 134.09%.
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Huang is now worth $36 billion as the stock has risen massively by 180.2% year-to-date. The co-founder of the company that manufactures AI chips that will be used across several industries now ranks 34 in the Bloomberg Billionaires Index.
The electrical and computer engineer who received his graduate degree from Stanford University founded Nvidia in 1993 after he worked at two chip companies, LSI Logic and Advanced Micro Devices.
Nvidia (NVDA Get Free Report began making chips for PC graphics and later moved onto the gaming industry. In 1999, the company invented the GPU or video card.
Nvidia's Market Cap Near Trillion Dollars
Nvidia is about to enter an exclusive Silicon Valley club as its market cap continues to rise. The company's market cap reached $992 billion on May 30, nearly reaching the coveted trillion dollar threshold.
Nvidia's stock gained 27.5% in the two trading sessions following the release of its fiscal first quarter results on May 24.
The surge in Nvidia's stock price puts the semiconductor manufacturer in good company.
Shares of the Santa Clara, California-based graphics chip maker moved 38.74% higher during the past month.
Once Nvidia's market cap reaches $1 trillion threshold, the company would be among the ranks of other big tech companies such as Apple (AAPL Get Free Report, Alphabet (GOOGL Get Free Report, Amazon (AMZN Get Free Report and Microsoft (MSFT Get Free Report. Apple in 2018 was the first tech company to entire the trillion dollar market-cap club.
Nvidia’s stock would have to reach $404.86 to secure its $1 trillion market valuation, the Wall Street Journal calculated.
A surge in demand for the company's AI-focused semiconductors powered a fiscal first quarter earnings beat and a robust near-term outlook.
For the first quarter ended April 30, the company blasted Wall Street forecasts. An adjusted bottom line of $1.09 a share beat the consensus estimate of 92 cents a share. While revenue fell 13% to $7.19 billion, analysts had predicted only $6.52 billion.
Nvidia sees current-quarter revenue of around $11 billion, plus or minus 2%, compared with the Wall Street consensus of $7.15 billion.
"The computer industry is going through two simultaneous transitions — accelerated computing and generative AI,” said Huang. "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."
He added that Nvidia is ready to meet the demand.
"Our entire data center family of products — H100, Grace CPU, Grace Hopper Superchip, NVLink, Quantum 400 InfiniBand and BlueField-3 DPU — is in production," Huang said. "We are significantly increasing our supply to meet surging demand for them."
The group achieved dominance in the videogame market with its graphics cards. It is extending its strengths to artificial intelligence, as the use of AI is projected to increase exponentially across many industries.
"Nvidia's bullish long-term forecast of $11 billion for the next quarter is fueled by the growth of generative AI and the increasing acceleration and need for high-performance computing within data centers," said Lucas Keh, analyst at global research firm Third Bridge.
Companies Need to Embrace AI
The AI revolution, powered by what's known as large-language-model technology, is shaking up nearly every industry in the economy. It is believed that AI will cut significant corporate costs, create jobs that did not exist and kill many existing jobs.
It is in this context that Huang gave a commencement speech on May 28 at the National Taiwan University in Taipei.
Huang was blunt: companies and people who don't want to take an interest in AI and learn about it are going to become obsolete. This revolutionary technology will transform businesses and virtually every job, he said.
Both individuals and companies need to embrace this technology urgently, which is boosting Nvidia's stock price.
"Agile companies will take advantage of AI and boost their position. Companies less so will perish," Huang told graduating students according to excerpts of his speech according to Bloomberg. "While some worry that AI may take their jobs, someone who is expert with AI will."
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