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Nvidia (NVDA) stock hit an all-time high on Friday as the AI boom continues to expand into early 2024. Nvidia stock was up more than 2% at $584.87 as of midday. The AI giant’s stock rose about 18% in the first few weeks of the new year, and over the past 12 months it has risen 179%. And its market capitalization is rapidly approaching $1.5 trillion.
But Nvidia isn’t the only company benefiting from the AI hype. Rival AMD (AMD) hit a new intraday high on Thursday, stopping at $168.60 per share. This chipmaker is up 94% over the past 12 months. Intel (INTC) stock rose 57% during the same period.
META CEO Mark Zuckerberg announced Thursday that the company is spending billions of dollars to acquire thousands of Nvidia chips for AI projects. NVIDIA received a huge vote of confidence. In a post on Instagram Reels, Zuckerberg said Meta will build an AI infrastructure with 350,000 Nvidia H100 chips by the end of 2024, with the goal of developing general artificial intelligence.
Zuckerberg also said he wants to open source Meta’s general AI so that others can use and interact with it.
Nvidia is the world leader in AI chip development, with an estimated market share of 70% to 90% of the global market. But it’s not just hardware that’s helping Nvidia stay ahead of its rivals. The company’s Cuda software, which developers use to create his AI platform, also acts as the moat that keeps Nvidia above the fray.
Still, NVIDIA’s competitors are rallying to take market share. AMD debuted its MI300 accelerator in December, designed to compete with Nvidia’s data center accelerators. Meanwhile, Intel is building its own Gaudi3 AI accelerator, which will also compete with his Nvidia product.
But it’s not just AMD and Intel. Hyperscalers, including cloud service providers Microsoft (MSFT), Google (GOOG, GOOGL), Amazon (AMZN) and Meta, are increasingly turning to homegrown chips to power their AI accelerators. I am. is known as an ASIC or application specific integrated circuit.
Think of AI graphics accelerators from Nvidia, AMD, and Intel as jack-of-all-trades. These can be used for a variety of AI-related tasks, allowing the chips to handle anything businesses need.
ASICs, on the other hand, are masters of a single transaction. They are built specifically for a company’s unique AI needs and are often more efficient than graphics processing units from Nvidia, AMD, and Intel.
This is a problem for Nvidia because hyperscalers are spending a lot of money on AI GPUs. But as ASICs become more widespread, the need for Nvidia’s chips may fade.
However, the AI explosion is only just beginning. And the vast majority of companies that will benefit from AI have not yet entered it. In other words, there’s still a lot of room for growth. Even if Nvidia’s market share declines, revenues will continue to rise as the AI sector booms.
But for now, Nvidia remains the king of AI.
daniel howley I’m the technology editor at Yahoo Finance. He has been covering the technology industry since his 2011. You can follow him on Twitter. @Daniel Howley.
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