You can't spell Nvidia without AI
The chip giant has emerged as a powerhouse in artificial intelligence. Investors have taken notice.
Nvidia, which is not in the Dow, has a market valuation approaching $750 billion. That’s more than six times as much as the market cap of semiconductor giant Intel. which is among the Dow 30.
The huge discrepancy in how much Nvidia is worth compared to Intel clearly shows that Wall Street is rewarding Nvidia’s big presence in the world of artificial intelligence, or AI…not to mention Nvidia’s foothold in the cloud, gaming and graphics processing markets.
Shares of Nvidia have more than doubled this year while Intel is “only” up 11%. Intel also has lagged the performance of top rival Advanced Micro Devices, which has surged nearly 60% in 2023. AMD is worth about $165 billion, compared to just under a $130 billion market value for Intel.
Investors seem to be betting that both Nvidia and AMD are going to emerge as bigger winners from the AI revolution than Intel. It’s not that Intel doesn’t have a stake in the AI game. It does, particularly through its giant data center unit. But unless Intel steps up its AI game further, Wall Street may continue to reward Nvidia and AMD…the latter of which is rumored to be looking to partner with Microsoft on new AI chips.
Nvidia is undoubtedly the main (Ge)Force to be reckoned with. Heck, the company is so large that it is now even worth more than Warren Buffett’s Berkshire Hathaway. If Nvidia continues to remain this dominant…and extends its tech and market cap lead even more over Intel…then perhaps it won’t be too long before it does replace Intel in the Dow. (And maybe Berkshire will even one day buy a stake. It does own a giant position in Apple and a smaller one in Amazon after all, as well as one in data cloud software firm Snowflake.)