Surpassed Nvidia Growth Stock: The Rise to New Heights

Nvidia's growth stock has been a benchmark for the tech industry, but one company has surpassed its remarkable growth. This company has seen its stock price skyrocket, making it a hot commodity among investors.

In just a few years, this company's market value has increased by over 1,000%, outpacing Nvidia's growth. Its innovative products and strategic partnerships have been key drivers of this success.

The company's revenue has grown from $100 million to over $1 billion, a staggering 10-fold increase. This rapid expansion has been fueled by its cutting-edge technology and expanding customer base.

Investors have taken notice, with the company's stock price rising by over 500% in the past year alone. This remarkable growth has cemented its position as a leader in its industry.

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Nvidia's stock has risen sharply, boosted by the boom in artificial intelligence and performance that has exceeded expectations time and time again.

The company's fourth-quarter revenue increased 265% year over year to 22.1 billion US dollars, surpassing market expectations of 20.4 billion US dollars.

Nvidia's earnings are growing even faster than its share price, which means the stock still looks cheap. The stock's price-earnings ratio shrinks every time the earnings report is released, and the final price-earnings ratio is much higher than people expected.

Nvidia's expected price-earnings ratio is around 30 times, while its competitor AMD has an expected price-earnings ratio of 43 times. The Nasdaq 100 has a price-earnings ratio of 25 times.

Nvidia's growth has been driven by the rise of generative AI, and the company has a huge portion of the market for chips to build and operate AI chatbots, with a 95% share of the market.

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Nvidia's stock climbed over 4% on Tuesday, extending gains from the previous day when the company took over Microsoft as America's second-most valuable company.

This marks a significant milestone for Nvidia, with its stock now approaching its record closing high of $135.57, set on June 18.

The company's all-time intraday high of $140.76, set on June 20, is also within reach.

Nvidia's market value has been on the rise, surpassing Microsoft's in just a short period.

Here are some key statistics:

Nvidia's profit growth has surpassed its stock price growth, making the stock look relatively cheap. This is a surprising fact, given that Nvidia's stock price has risen sharply due to the boom in artificial intelligence.

Nvidia's earnings are growing even faster than its share price, which is a key indicator of a company's financial health. In fact, Nvidia's fourth quarter revenue increased 265% year over year to 22.1 billion US dollars, surpassing market expectations.

The stock's price-earnings ratio shrinks after each earnings report, as the final ratio is much higher than expected. This is a good sign for investors, as it suggests that the stock is still undervalued.

Nvidia's valuation is still lower than that of its peers, such as AMD, which has an expected price-earnings ratio of 43 times. Nvidia's expected price-earnings ratio is around 30 times, which is relatively low compared to the Nasdaq 100's price-earnings ratio of 25 times.

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Nvidia's CEO, Wong In-hoon, has expressed optimism about the company's long-term prospects, citing the surge in demand for AI in various industries. This optimism is shared by some investors, who believe that Nvidia's growth cycle will continue beyond 2024.

However, not all investors are convinced that Nvidia's growth will continue unabated. Alec Young, chief investment strategist at Mapsignals, has cautioned that the current exponential growth cannot last forever.

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Nvidia is one of the world's largest producers of GPUs, with revenue of $30 billion for its fiscal second quarter ending July 28, 2024, a 15% increase from the previous quarter and 152% from the previous year.

The company's earnings reports exceeded expectations throughout 2023 as AI started gaining momentum and attention, with Nvidia's advanced chips being used to train generative AI programs.

Nvidia's revenue has more than doubled in each of the past five quarters, with at least tripled in three of those periods, according to CNBC.

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The market for chips to build and operate AI chatbots is accelerating, with AMD estimating the market could reach $500 billion by 2028, a 25% increase from the company's prior forecast.

Nvidia controls a huge portion of that market, with analysts at Mizuho estimating Nvidia has a whopping 95% share of the market, CNBC reported.

Demand for Nvidia's Blackwell chip is "insane", with Microsoft, Meta, Google, and Amazon purchasing Nvidia's GPUs in massive quantities to build large clusters of computers for AI.

Nvidia's share of capital expenditures is rising as customers invest more in systems to build AI models, with Nvidia's GPUs expected to grow 118% in 2024 and 84% in 2025.

Nvidia's CEO Jensen Huang recently described demand for Blackwell as "insane" and the company "expects billions of dollars in revenue from the new product in the fourth quarter", noted CFO Colette Kress.

Reasoning-based AI could be a large new product category for Nvidia, with "every indication that business remains robust with very high forward visibility", noted Morgan Stanley analysts who met with management.

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Nvidia's market capitalization has more than doubled in the past 17 months, adding about $2.4 trillion. This rapid growth is largely driven by the demand for Nvidia's graphics processing units (GPUs) from cloud service providers building and deploying AI chatbots.

Nvidia's revenue has more than doubled in each of the past five quarters, with at least tripled in three of those periods. Analysts expect the company's expansion to slow to about 82% in the quarter ending in October, with revenue of $32.9 billion.

Microsoft, Meta, Google, and Amazon are among the companies purchasing Nvidia's GPUs in massive quantities to build large clusters of computers for AI. Nvidia CEO Jensen Huang recently described demand for the Blackwell chip as "insane".

The generative AI market is expected to continue growing, but more rules and regulations are going to be introduced that could affect Nvidia's AI chips. This could impact Nvidia's growth, particularly if Chinese sales, which were a large part of Nvidia's data center sales, are affected by U.S. trade restrictions.

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Nvidia's data center business is a leading driver of success, with demand for AI infrastructure driving nearly 87% of Nvidia's revenue. Other Big Tech companies, such as Google, Microsoft, and Meta, continue to invest in AI and announced increased AI spending in their earnings reports.

Orders for Nvidia's new Blackwell chips are booked out 12 months or so, with every indication that business remains robust with very high forward visibility. This suggests that Nvidia's recent optimism about Blackwell has relieved concerns for some investors.

Nvidia's customers are boosting their capital expenditures, which is a great sign for the company's growth.

Recent events have made large companies more optimistic about investing in generative AI, and Nvidia is poised to benefit from this trend.

Microsoft is expected to boost capital expenditures by about 33% to $58 billion, according to Bloomberg, which could lead to a significant increase in demand for Nvidia's AI chips.

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Orders for Nvidia's new Blackwell chips are solid, with every indication that business remains robust with very high forward visibility, noted Morgan Stanley analysts.

Nvidia's share of cloud services providers' capital expenditures could rise as the company sells both its legacy Hopper GPUs and its new Blackwell platform.

Nvidia GPUs are expected to grow 118% in 2024 and 84% in 2025, giving the company 31% of all capital spending from U.S. cloud providers in 2024 and about a 35% share in 2025, according to Malik.

The demand for AI chips could continue as rivals fear being left behind, and companies building AI chatbots face a "Prisoner's Dilemma" where the costs of not investing in AI are devastating, according to TD Cowen analysts.

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Nvidia's Innovation Excellence is a key factor in its success, with the company earning higher margins due to its chips working better, top-notch engineers, and unrivaled R&D producing a plethora of innovations.

Nvidia plans to continue upgrading its AI accelerators annually, with the Blackwell Ultra chip set to be announced in 2025 and Rubin, a next-generation platform, introduced in 2026.

The company's focus on innovation has investors excited, with one analyst raising his price target for Nvidia to $150, citing the increasing complexity of AI workloads.

Nvidia's share of capital expenditures from U.S. cloud providers is expected to rise, with estimates suggesting 31% in 2024 and 35% in 2025.

The growing demand for AI chips could continue as rivals fear being left behind, with companies building AI chatbots facing a "Prisoner's Dilemma" where the costs of not investing in AI are devastating.

Nvidia's recent optimism about Blackwell has relieved concerns for some investors, with orders for the new chips booked out 12 months or so and every indication that business remains robust with very high forward visibility.

Reasoning-based AI could be a large new product category for Nvidia, with compute-intensive requirements that could give the company a huge new revenue stream.

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