One of the key sectors for economic and technological development on our planet is chips. In our era, these small and increasingly complex components are like the gold of our generation, and it can even be said that chips are a globally strategic component or material.
I remember that several months ago I wrote an article about chips and the seemingly endless demand for semiconductors, and I mentioned that the United States strongly wanted a company that would dominate a sector that could be a relevant strategic point for the geopolitics of this decade, and now we see Nvidia as the flagship of the United States in the technological field that will revolutionise the way we live, artificial intelligence. Importantly, the chip shortage could lead to a war between the powers that be.
Nvidia, leader in chips for Artificial Intelligence
It is no secret that one of the main reasons why Nvidia has attracted so many attention and that its stock market value has surpassed that of an iconic technological giant such as Google, is undoubtedly the development of chips for artificial intelligence, in what could be classified as a new market, but which this company was able to take advantage of with its high quality products. In particular, I think there are three key reasons why this company is one of the jewels in the technological field today.
Innovation: From video games to artificial intelligence, a path that starts almost 20 years ago when AI started to make sense beyond science fiction movies, Nvidia is one of those companies that bet on innovation and that is one of the key aspects to understand the success of this kind of technology companies.
One of the profitable aspects is the design of the chips, in fact, not only do they make profits by manufacturing the chips, they also make profits by creating and patenting the designs. This is a competitive market and every improved design means profits for the company. The company is a world leader in the design and manufacture of (GPU) and system-on-chip(SoC), which enable data processing and AI development, in that sense, the company leads the market share on AI chips, due to its quality.
Quality: Another of those important aspects in the technological field is quality, designing and producing products that are advantageous over those offered by the competition, even if it implies a higher cost, however, for a new technological branch such as AI it is undoubtedly that competition is not focused on cost, but on the quality and functionality of the technology.
Vision: Another relevant aspect is that this company was able to see the need and global problems regarding chips and was able to adapt to take advantage of this situation, exploiting a market that few would have bet on two or three decades ago.
Nvidia Balances the Balance of Chips
As I mentioned earlier, in the geopolitical agenda, chips represent a relevant aspect even for world peace, after all, every device uses chips, even weapons of war, so it literally means an aspect of national security, in that clash for chips, China is one of those giants that need more chips, for that reason, Nvidia means much more than a technology company, it represents technological supremacy in terms of semiconductors, something that cannot go unnoticed both from an economic and technological point of view.
Nvidia's growth:
The daily chart shows an impressive growth in the value of Nvidia shares, with each share costing $112 in October 2022 and only two years later they are worth $785, which means a revaluation that cannot go unnoticed by the North American market. Nvidia is undoubtedly a key player in the technology sector and its influence has been notorious in the Nasdaq index, being one of those companies that have boosted the economy by taking advantage of the technology sector such as the development of an essential component for our modern life as well as for the future of our species, the chips.
Nvidia shares
Nasdaq 100
Nvidia May Become Too Big
One of the downsides of Nvidia's exponential growth is that innovation and manufacturing in a sector that could revolutionise our jobs and our entire lives is centralised in one company, which in one way or another gives too much power to a company that could be a determining factor in our near future.
Posted Using InLeo Alpha
Nice comparison between #Nvidia and #Intel over the last 10 years: