Silicon Valley-based Nvidia sees earnings soar, cementing dominance in AI

SANTA CLARA, CA - Santa Clara-based Nvidia says it is now the third most valued company behind Microsoft and Apple. The tech company’s stock has risen more than 200% in the past year.

Nvidia shares rose 6% in after-hours trading to over $1,006, and the company increased its dividend by $.06 a share. Nvidia also announced on Tuesday that it is expanding its collaboration with Microsoft, as it becomes the dominant player in artificial intelligence.

"Nvidia is the one who controls the market. About 90% of the market for those chips is used to process Chat GTP, and Gemini; that actually belongs to Nvidia," said Ahmed Banafa, a San Jose State University professor of engineering.

Specializing in making graphical processing units or chips for artificial intelligence, Nvidia’s products are in high demand. Thousands of companies, including Amazon, Google, Meta, and Microsoft, are signaling their plans to incorporate AI systems into their operations.

"There are about 20,000 AI startups lining up for any available chips coming from Nvidia," said Banafa. "Nvidia has the best chips available on the market right now."

Nvidia’s net income has jumped from $2.04 billion to $14.88 billion over the last year. Analysts say the gains are fueled by the demand for A.I. systems that can compose documents, make images, and serve as personal assistants.

"Today they announced a 10 split for every one of the shares. That’s going to make it more available for people to buy in, a lot of people are going to invest there," said Banafa.

Founded in 1993 by Jensen Huang, Banafa says Nvidia will continue to expand, and people should expect that AI will be a part of their daily lives.

Nvidia’s chips are also used in the gaming and automobile industries. The company says it has become much faster at training AI models that can understand speech, learn to reason, and plan.