5 min read

Nvidia’s 227% year-to-date stock ascent

Nvidia revolutionised the gaming industry in the 1990s by inventing ultra-fast graphics processing units. Decades later they’ve whooshed past Wall Street expectations with their tech innovation driving generative AI for Big Tech. Far from overnight success, Nvidia was a slow burn, rewarding investors who joined them on day one.
Risk, returns & timeframes illustration
August 29, 2023
Belinda Nash

Everyone’s talking about AI chipmaker Nvidia. Nvidia’s (NVDA) stock has soared 196% since August 2022 - growing more than 220% this year alone - and while all eyes are on what’s next for the tech innovator that began life in a Silicon Valley diner, the company’s forecasts indicate that these may not be flash-in-the-pan results. 

Nvidia co-founder, president and CEO Jensen Huang - whose own net worth at the helm of the tech titan for 30 years now places him 28th richest person on the planet - expects sales of their sought after processors to climb 170% this quarter, likely surpassing their projected US$16 billion - numbers that may place Nvidia on track to reach their forecast annual revenue of US$50 billion. This is five times greater than 2020 when crypto-mining started to inflate demand for GPUs, with net profit increased from 10% in 2022 to around 46% in the current third quarter.  

With clients Alphabet, Amazon, Meta and Microsoft boosting Nvidia’s data centre revenues, Nvidia’s gain hasn’t helped AMD (AMD) and Intel (INTC) with both companies’ stock falling 6% and 1% respectively since Wednesday. But has Nvidia’s success rubbed off on Taiwan Semiconductor Manufacturing Co (TSM - ADR), which manufactures the bulk of Nvidia’s orders? Morgan Stanley analysts estimate that TSMC’s revenue from AI semiconductors may grow 6% this year, and following Nvidia’s highly anticipated earnings report last Wednesday, Asia’s semiconductor stocks climbed. 

Nvidia’s parallel processing packs a punch. 🥊 Nvidia’s Hopper 100 GPU (H100), which retails for US$30,000, holds 80 billion transistors, which is a cool 13 million more than Apple’s next gen SoCs (systems on a chip) used in their most recent MacBook Pro. In March this year, Huang told CNBC he ‘hand-delivered’ his Hopper to ChatGPT-maker OpenAI, adding:

‘What makes Hopper really amazing is this new type of processing called transformer engine. The transformer engine is the T of GPT, generative pre-trained transformer. This is the world’s first computer designed to process transformers at enormous scale. So large language models are going to be much, much faster and much more cost effective.’

Chip-chip-chippin’ away ⛏️

Nvidia’s US$1.157 trillion mega cap was three decades in the making:

  • 1993:Scrappy underdog’ Nvidia - from  ‘invidia’, the Latin word for envy - was founded in California by a trio of engineers with an eye for the future, kicked off by building 3D gaming graphics
  • 1999: What proved a game changer - literally - Nvidia invented graphics processing units (GPUs) starting with GeForce 256, launched the Partner Network, and listed on the Nasdaq in January for US$12 at the peak of the dotcom bubble - investors who bought US$10,000 Nvidia stock then could be sitting on US$7,521,739 today
  • 2006: Alongside building parallel computing platform CUDA, Nvidia ensured their programming language was taught at more than 200 universities worldwide
  • 2012: Nvidia took a ‘whole company’ approach, launching modern AI, with every chip made ‘focused on artificial intelligence’, Huang revealed in his CNBC interview

Driving on the moon? 🌕 Generative AI might still be on training wheels, but that didn’t stop the world’s largest advertising agency, WPP, from ‘going all in’ with Nvidia this May, jumpstarting generative AI advertising. Yep, cars dusting it up on the moon might be coming to a screen near you any day now. 

Nvidia deflected August waves that struck the ‘magnificent seven’ 

The US summer vacay season sucked the tide out from the share markets, leaving six of the world’s biggest tech stocks - which comprise around 51% of the Nasdaq 100 Index (^NDX) - landing a bumpy ride this August, shooting the Index down 4%:

  • Amazon (AMZN): down 0.4% during the month
  • Alphabet (GOOGL, GOOG): down 1%
  • Apple (AAPL): down 8% 
  • Meta (META): down 9%
  • Microsoft (MSFT): down 3%
  • Tesla (TSLA): down 10.5%

And while spring might spell optimism for our Kiwi summer, it may yet be a nervous wait on Wall Street hoping the tide rushes in to eclipse the September Effect. 🌊

Weekly news from Wall St
Subscribe to The Fry Up - your weekly sizzle of headline-grabbing share market news. Read by 60,000 Kiwis to help them take charge of their investing journey.
Free Getting Started Course
Take your first, or next, step to becoming a confident investor with Hatch's free online course – just 10 minutes a day, for 10 days.

We’re not financial advisors and Hatch news is for your information only. However dazzling our writing, none of it is a recommendation to invest in any of the companies or funds mentioned. If you want support before making any investment decisions, consider seeking financial advice from a licensed provider. We’ve done our best to ensure all information is current when we pushed ‘publish’ on this article. And of course, with investing, your money isn’t guaranteed to grow and there’s always a risk you might lose money.

Belinda Nash
Finance writer

More recent news articles

More recent learn articles

5 min read
Sep 26, 2023

Are petrol prices and oil stocks on the rise?

Will Kiwis face queues at petrol stations as we seek out competitive petrol in the face of rising global oil barrels hitting a 10-month high? This June, Opec+ oil producing members agreed to lower oil supply and agreed again this September to continue. So what does that mean for Big Oil stocks?
Read more
5 min read
Sep 19, 2023

Cruise ship stocks climb in post-pandemic recovery

Summer’s set to sizzle in Aotearoa but not everyone’s happy that the cruise industry’s setting sail to our calm waters. Behemoth passenger ships are bringing record numbers of tourists to our shores as the global cruise industry recovers from their Covid woes. We zoom out five years to see what’s been going on.
Read more
5 min read
Sep 12, 2023

Airbnb stock jumped 11% this September... why?

From NYC to Paris and plenty of places in between, Airbnb’s been battling for their place in the short term rental market. But cities are saying otherwise. In a global cost of living crisis, residents are being squeezed out of rental properties and now the Big Apple’s regulators are coming in hard. So why's Airbnb's stock soaring?
Read more
// will cause all rich text links to open in a new tab