The meteoric rise of the California-based chipmaker's valuation has brought flashbacks from the dot-com era when the internet was booming like AI is in today's day
Nvidia CEO Jensen Huang presents their Blackwell platform at an event ahead of the COMPUTEX forum, in Taipei, Taiwan June 2, 2024. Image: Reuters/Ann Wang
Nvidia’s stock has multiplied tenfold since late 2022 and almost tripled so far this year. The chipmaker became the world's most valuable company for the first time on June 18, after its market capitalisation surpassed Microsoft and Apple briefly. It took Microsoft and Apple about six years to touch the $3 trillion-mark from $1 trillion. Whereas Nvidia did it in one year.
The stock increased in value by 591,000 percent since it went public in 2000. This meteoric rise was driven thanks, in part, to its first-mover advantage of introducing graphic processing units (GPUs) and now, its AI revolution.
However, this astronomical growth has raised questions about whether the current AI [artificial intelligence] boom is a bubble. The rise of Nvidia's valuation has brought flashbacks from the dot-com era when the internet was booming like AI is today. Things ended on a bitter note then, with the Nasdaq index falling over 50 percent in the late 1990s, due to the drastic fall of Cisco and other tech stocks.
While this certainly doesn’t indicate that the current AI boom led by Nvidia would meet a similar fate. But doubts have risen and they will linger. The company's revenue and earnings are growing fast. Experts say that it justifies the company’s stock growth in value. Revenue increased 260 percent year on year in the first quarter of 2025. Over the last few years, the demand for Nvidia's most powerful and advanced computer chips necessary for artificial intelligence has boosted sales and profits. Google, Meta, Microsoft, Amazon, and OpenAI buy billions of dollars of Nvidia’s GPUs.
The semiconductor company’s largest and most important business is the sales of the parts it makes for data centres. This includes its AI chips as also many of the additional parts needed to run big AI servers. Nvidia said its data centre category rose 427 percent from the year-ago quarter to $22.6 billion in revenue, led by the shipments of the company’s Hopper graphics processors, which include the company’s H100 GPU. The big buyer was Meta for its Lama 3, the latest large language model (LLM), which used 24,000 H100 GPUs.