The Evolution of Nvidia’s Fortunes
Nvidia Corp. (NVDA) emerged as the stock of the year in 2023, continuing its upward trajectory in 2024 as the artificial intelligence revolution gained momentum. Noteworthy personalities, such as CNBC’s Mad Money host Jim Cramer, have been stalwart supporters of the company and its visionary CEO, Jensen Huang.
Resilience Amidst Doubt
In a surprising turn of events in late 2022, Cramer advised selling Nvidia due to concerns surrounding the Ethereum merger. He highlighted the potential impact of Ethereum’s changes on Nvidia’s graphics cards, leading to doubts about the company’s future in AI, virtual reality, and machine learning.
Nvidia’s Meteoric Rise
Following a challenging period marked by economic uncertainty and geopolitical tensions, Nvidia’s stock rebounded, fueled by the AI revolution catalyzed by OpenAI’s ChatGPT. This revolution significantly boosted demand for Nvidia’s high-performance chips, leading to impressive fourth-quarter earnings and revenue that surpassed estimates.
The Returns of Belief
An investment of $1,000 in Nvidia on Sept. 19, 2022, would have yielded 7.5 shares, now valued at $5,894 based on the closing price of $788.17 on Friday. This remarkable growth translates to a return of approximately 490% in just a 17-month period.
Market Cap Ascent
On Friday, Nvidia reached a $2 trillion market cap, nearing a significant milestone. With the AI sector entering a transformative phase, Nvidia is poised to become one of the most valuable companies. Analysts like Wedbush’s Daniel Ives recognize the pivotal role Jensen and Nvidia play in the tech landscape, driving a generational transformation.
Despite naysayers warning of a potential AI bubble burst and increased competition, others like Deepwater Asset Management’s Gene Munster foresee the AI momentum continuing for the next few years.
