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Why Nvidia Becomes the Most "Expensive" Semiconductor Company in the World

Source: www.qierge.net Author: Qi Erge Time: 2022-11-10 14:09 View: 6547883

Second Brother: Why Nvidia Becomes the Most "Expensive" Semiconductor Company in the World

Recently, Nvidia surpassed Berkshire Hathaway, the investment company of Warren Buffett, for the first time in terms of market value, and became the seventh largest listed company in the US stock market. On November 2 local time, Nvidia's stock rose to $264.01, or 2.22%, and Berkshire Hathaway's stock rose 0.6%. According to relevant data, based on the closing price, NVIDIA's market value is $660 billion, higher than Berkshire Hathaway's market value of $652.4 billion.

After that, Nvidia's stock continued to rise slightly. As of the close of 16:00 on November 3, US Eastern Time, the value of Nvidia's stock market had reached 664.95 billion US dollars. According to statistics, since the low point on March 16, 2020, the market value of Nvidia has increased by nearly $530 billion, which is higher than the sum of the current market values of Intel and Broadcom. Against the backdrop of a lack of "core", Nvidia's share price has risen steadily, even surpassing TSMC, becoming the most "expensive" semiconductor company in the world. From the current business landscape, Nvidia's "glory" today is related to its expansion of chip business, and the "Yuanuniverse" Dongfeng is also an important reason why the market gives Nvidia a high premium.

The rise of share price stems from the expansion of business territory

At present, investors swarmed to Nvidia, throwing money at Nvidia crazily. Behind it, NVIDIA's "soaring" share price actually stems from its own expansion of the business landscape.

"We are only 30 days away from bankruptcy forever." Huang Renxun, the co-founder of Nvidia, has such a well-known catchphrase. This sense of crisis gives Nvidia a pioneering spirit of innovation and a keen sense of business expansion.

Nvidia's pioneering and enterprising business should start with GPU. After more than ten years of "scuffle" in the graphics card industry, 80 manufacturers gradually disappeared in the torrent of time. In the 21st century, Nvidia has gradually established its dominant position in the GPU market.

In 2001, Nvidia gave the GPU programmability. At first, Nvidia just wanted to build the best 3D graphics chips for global gamers. However, Nvidia gradually realized that scientists also need to use GPU to speed up computing, and programming with GPU when accelerating computing is a painful thing. In order to solve the difficulties in the market, Nvidia appointed David Kirk as the chief scientist and secretly launched a project called CUDA, which aims to create a universal parallel computing architecture, so that GPU is not just a graphics processing chip. Since 2006, Nvidia has invested a lot of resources in this project and decided to let every GPU in the future support CUDA.

With Nvidia's CUDA computing framework, developers can no longer use complex machine languages for programming, but directly use the CUDA framework to calculate programs written in high-level languages with GPU.

Nvidia leads the whole industry, and commercializes the GPU business in the initial vertical application and game field. Later, when the AI industry was not favored by the market at the early stage of development, Nvidia foresaw the application of GPU in the AI market and made decisive R&D investment.

In 2021, NVIDIA, as the leading GPU manufacturer, entered the CPU core territory and built three new processors based on ARM. Among them, Grace is a revolutionary data center CPU based on ARM architecture, which is mainly aimed at large data intensive HPC and AI applications, and will promote AI, cloud and high-performance computing to new heights.

Today, Nvidia has jumped out of the single framework of the chip industry and expanded its business to data centers, professional visualization, smart cars, mining cryptocurrencies and other fields with more scale and profits, building a solid moat.

Meta Universe Boosts Nvidia's Share Price

In 2021, Forbes magazine once wrote that Nvidia's market value will surpass Apple in five years. Although the current market value of Nvidia has risen significantly, it is still less than $1 trillion. In contrast, the market value of Apple is close to $2.5 trillion, and Nvidia is still far behind Apple in terms of market value. Why does Forbes magazine predict that Nvidia will surpass so much in 5 years?

Nvidia's precise investment in the "technological revolution" may be one of the reasons Forbes magazine makes a judgment. Artificial intelligence, digital twins, and the now burning metauniverse and other technologies are all likely to lead to the next technological revolution in the future. Nvidia is the company that actively laid out these frontier fields early. Beyond the traditional pattern of a chip company, Nvidia's various initiatives have given investors more room to imagine, so the P/E ratio has kept rising and the market value has also kept rising.

Nvidia never seems to be stingy in expressing its yearning for the meta universe. In August 2021, a "virtual human" video of Huang Renxun was screened on various social platforms. In this video, Huang Renxun used a 14 second "virtual human" stand in in a public speech, but no one noticed the stand in. This digital stand in was made using Omniverse, a meta universe infrastructure platform developed by Nvidia. According to the introduction, this infrastructure platform is a software platform for creating virtual space.

Relevant information shows that the metauniverse platform Omniverse is open to developers around the world. Since its official launch in December 2019, more than 500 companies have used it to develop their own metauniverse, and more than 50000 individual creators have downloaded the platform. In a word, with the help of this popular speech video on the whole network, Nvidia has made the technology of the metauniverse "show its sharp points" through "virtual people", which has further attracted the attention of the world to the Omniverse platform, which is also the strongest capital for Nvidia to take the lead on the metauniverse track.

A few days ago, Richard Kerris, the general manager of NVIDIA's media and entertainment industry, also expressed his optimism for the metauniverse in an interview with the media. Richard Kerris said that the meta universe, as a connected virtual world, will soon become a reality.

"You may think that you will not enter the metauniverse, but I promise that within five years, all of us will enter it in one way or another. Top companies will also be built on an interconnected virtual world," said Richard Kerris.

At this stage, NVIDIA has carried out a more in-depth layout of the metauniverse, is using chip technology to help render the metauniverse world, and also promotes the Universal Scene Description Standard (USD), which was first developed by Pixar, an animation company, to unify the physical rules of the virtual world and achieve mutual compatibility between equipment and software.

With its advantages in AI hardware and software integration system, Nvidia successfully took the "Meta Universe" express train, attracting investors to invest a lot of money in it. In fact, how much NVIDIA's market value is mainly related to the interests of the company and investors. However, technologies such as artificial intelligence, digital twins and the metauniverse are the cornerstone of the progress and development of the entire human society. It is hoped that the cutting-edge technology represented by the Metauniverse can achieve development as soon as possible and finally land on the market, bringing real benefits to human society, rather than just bringing investors a feast of money and bragging about the "next outlet".