Artificial intelligence (AI) is revolutionizing many industries, and the financial sector is no exception. Companies have grown rapidly, and the world of stock trading has evolved. While students benefit from AI tools like Chat GPT and Bard, their influence on the stock market presents great opportunities. Much of the financial side is overlooked because since AI has been so helpful, many people don’t care that America’s wealth gap has increased because of new financial opportunities. Some tech companies could be classified as robber barons because of the amount of revenue they generate from AI. Yet, they could be recognized as captains of industry because they are pushing the world to the next level.
One key impact is the rise of companies like Nvidia. Nvidia creates powerful microchips that enable artificial intelligence applications to work. Tech giants (that don’t produce microchips) have shifted their focus to the development of artificial intelligence, they must outsource these powerful microchips. Therefore, the demand has increased, and Nvidia, a level ahead of all the microchip producers, has taken over the market. Throughout the first quarter of 2024, Nvidia recorded a revenue of $26.0 billion, almost triple the sales they had exactly a year ago.
Nvidia’s revenue evolution showcases how AI can create new market leaders and powerful figures within the tech industry. Jensen Huang’s net worth went from $4 billion in 2020 to over $100 billion today. His efforts in advancing Artificial Intelligence have been recognized. As I mentioned, more companies are investing money in AI, and the focus on AI has led to job security concerns. Large companies like Google have reportedly laid off many employees in lucrative areas (Bay Area and New York) because they need to spend the money on AI, not employee salaries. Google might spend hundreds of millions with Nvidia each year so they can further their AI development. Google hasn’t spent this much money with Nvidia before. Many highly renowned companies are obsessed with Artificial Intelligence, and their obsession helps Nvidia’s financial growth. Nvidia’s massive growth in earnings is a direct reason why its stock price has gone up $772 in the last year, making each share worth over $1,100.
Nvidia’s revenue evolution showcases how AI can create new market leaders and powerful figures within the tech industry. Jensen Huang’s net worth went from $4 billion in 2020 to over $100 billion today. His efforts in advancing Artificial Intelligence have been recognized. As I mentioned, more companies are investing money in AI, and the focus on AI has led to job security concerns. Large companies like Google have reportedly laid off many employees in lucrative areas (Bay Area and New York) because they need to spend the money on AI, not employee salaries. Google might spend hundreds of millions with Nvidia each year so they can further their AI development. Google hasn’t spent this much money with Nvidia before. Many highly renowned companies are obsessed with Artificial Intelligence, and their obsession helps Nvidia’s financial growth. Nvidia’s massive growth in earnings is a direct reason why its stock price has gone up $772 in the last year, making each share worth over $1,100.
Nvidia’s stock price is parallel to their earnings - both rising considerably. Furthermore, back in 2020, before the popularity of AI, Nvidia was only worth 145 billion. Today, they are worth over 2 trillion, more than 10 times the worth of their rival, AMD, another microchip producer. Similar to Nvidia, AMD has grown too. Although AMD hasn’t grown as much as Nvidia, it is still important to note how Artificial Intelligence has also affected their financial power. Their revenue has increased 10% from the previous year, resulting in a 33% growth in share prices.
Even though Nvidia’s revenue and stock prices are roughly 10 times higher than AMD's, there are still similarities. Both companies have experienced growth in sales, profits, and stock prices since the race for AI took off. They have advanced GPU technology to meet the demands of Artificial Intelligence because they understand the significance of the roles that Artificial Intelligence plays in machine learning and data analysis. Moreover, they have both invested heavily in AI and the sacrifices they have made overall paid off. If it weren’t for Artificial Intelligence, Nvidia and AMD may not have experienced this dramatic uptick of revenue.
Sources:
“Advanced Micro Devices, Inc. (AMD) Stock Price & News.” Google Finance, https://www.google.com/finance/quote/AMD:NASDAQ. Accessed 5 June 2024.
“AMD Reports Fourth Quarter and Full Year 2023 Financial Results.” Advanced Micro Devices, Inc., 30 Jan. 2024, https://ir.amd.com/news-events/press-releases/detail/1180/amd-reports-fourth-quarter-and-full-year-2023-financial.
Clark, Don. “Nvidia, Powered by A.I. Boom, Reports Soaring Revenue and Profits.” The New York Times, 22 May 2024. NYTimes.com, https://www.nytimes.com/2024/05/22/technology/nvidia-quarterly-earnings-results.html.
“NVIDIA Announces Financial Results for First Quarter Fiscal 2025.” NVIDIA Newsroom, http://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-first-quarter-fiscal-2025. Accessed 5 June 2024.
“NVIDIA Corp (NVDA) Stock Price & News.” Google Finance, https://www.google.com/finance/quote/NVDA:NASDAQ. Accessed 5 June 2024.
“NVIDIA Revenue 1995-2024.” Stock Analysis, https://stockanalysis.com/stocks/nvda/revenue/. Accessed 5 June 2024.
