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NVIDIA Corporation (NVDA - Free Report) on Wednesday joined the exclusive club of companies with a $1 trillion market capitalization. This makes the graphic processing unit (GPU) maker the fifth publicly traded U.S. company following Apple, Microsoft, Alphabet and Amazon, which have a valuation of more than trillion dollars as of Jun 14.
NVIDIA has been on a remarkable run since the beginning of 2023, with its share prices soaring 196% year to date (YTD) on hopes that the company will be a prime beneficiary of growing investments in generative artificial intelligence (AI).
What’s Driving the Stock Higher?
Though AI has been around for years, the meteoric rise of OpenAI’s ChatGPT has captivated the world’s attention on the power of generative AI to augment human capability, suggesting that the AI boom may just get started.
Generative AI is a type of AI technology that can produce various types of content, including text, imagery, audio and synthetic data. It is driven by a large language model, which means it uses a lot of data to understand and generate conversations.
The growing demand to modernize the workflow across industries is expected to drive the demand for generative AI applications. The global generative AI market size is anticipated to reach $109.37 billion by 2030, according to a new report by Grand View Research. The market is expected to expand at a CAGR of 35.6% from 2023 to 2030.
The adoption of ChatGPT among enterprises has already proven generative AI technology’s usefulness across multiple industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy & utilities and video game development.
The proven success of generative AI has sparked competition among software makers, including Salesforce (CRM - Free Report) , Cisco (CSCO - Free Report) and Adobe (ADBE - Free Report) , to integrate the technology into their products. However, generative AI requires vast knowledge to create content and needs huge computational power. As a result, enterprises looking to create generative AI-based applications will require to upgrade their existing network infrastructure.
NVIDIA’s next-generation chips with high computing power can be the top choice for enterprises. The company’s CEO, Jensen Huang, already stated during the first-quarter fiscal 2024 earnings conference call that existing data centers are insufficiently equipped to handle growing AI workloads.
NVIDIA’s GPUs are already being applied in AI models, which is expanding its footprint in untapped markets like automotive, healthcare and manufacturing. The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. NVIDIA expects its second-quarter fiscal 2024 revenues to reach $11 billion from $6.7 billion in the year-ago quarter, largely driven by surging AI investments across the data center end market.
Software Giants Integrating AI Tools
Salesforce forayed into the generative AI space with the launch of Einstein GPT in March 2023. Earlier this week, the company elevated the set of its generative AI tools with the launch of the AI Cloud service. With this, the company claims to offer one-stop AI-powered solutions for enterprises looking to enhance productivity.
Salesforce’s newly launched AI Cloud is a suite of services that delivers enterprise-ready real-time, open and secure generative experiences across all applications and workflows. The suite will power new capabilities across Salesforce’s products, including Einstein service, data analysis software Tableau and workplace-messaging app, Slack.
Cisco’s AI and machine learning offerings encompass a wide range of computing solutions for enterprises, including a focus on cybersecurity. The company plans to enhance customer experience solutions, devices and its video conferencing platform, Webex Suite, with ML technologies, automation and generative AI features from meeting summaries to visual enhancements.
The digital media solutions provider, Adobe, aggressively expanded its footprint in the generative AI space through partnerships and new solutions. Adobe has unveiled a family of generative AI models, Firefly, focused on the generation of texts and images. Per the company, Firefly will offer more precision, speed, power and ease in content creation. It will let users of various experience levels create high-quality images and stunning text effects.
At present, NVIDIA sports a Zacks Rank #1 (Strong Buy), while Adobe has a Zacks Rank #2 (Buy). Salesforce and Cisco each carry a Zacks Rank #3 (Hold). Shares of ADBE, CRM and CSCO have rallied 43.4%, 57.8% and 6.9%, respectively, YTD. You can see the complete list of today's Zacks #1 Rank stocks here.
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NVIDIA (NVDA) Joins $1T Club: What's Behind the 196% YTD Rally?
NVIDIA Corporation (NVDA - Free Report) on Wednesday joined the exclusive club of companies with a $1 trillion market capitalization. This makes the graphic processing unit (GPU) maker the fifth publicly traded U.S. company following Apple, Microsoft, Alphabet and Amazon, which have a valuation of more than trillion dollars as of Jun 14.
NVIDIA has been on a remarkable run since the beginning of 2023, with its share prices soaring 196% year to date (YTD) on hopes that the company will be a prime beneficiary of growing investments in generative artificial intelligence (AI).
What’s Driving the Stock Higher?
Though AI has been around for years, the meteoric rise of OpenAI’s ChatGPT has captivated the world’s attention on the power of generative AI to augment human capability, suggesting that the AI boom may just get started.
Generative AI is a type of AI technology that can produce various types of content, including text, imagery, audio and synthetic data. It is driven by a large language model, which means it uses a lot of data to understand and generate conversations.
NVIDIA Corporation Price
NVIDIA Corporation price | NVIDIA Corporation Quote
The growing demand to modernize the workflow across industries is expected to drive the demand for generative AI applications. The global generative AI market size is anticipated to reach $109.37 billion by 2030, according to a new report by Grand View Research. The market is expected to expand at a CAGR of 35.6% from 2023 to 2030.
The adoption of ChatGPT among enterprises has already proven generative AI technology’s usefulness across multiple industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy & utilities and video game development.
The proven success of generative AI has sparked competition among software makers, including Salesforce (CRM - Free Report) , Cisco (CSCO - Free Report) and Adobe (ADBE - Free Report) , to integrate the technology into their products. However, generative AI requires vast knowledge to create content and needs huge computational power. As a result, enterprises looking to create generative AI-based applications will require to upgrade their existing network infrastructure.
NVIDIA’s next-generation chips with high computing power can be the top choice for enterprises. The company’s CEO, Jensen Huang, already stated during the first-quarter fiscal 2024 earnings conference call that existing data centers are insufficiently equipped to handle growing AI workloads.
NVIDIA’s GPUs are already being applied in AI models, which is expanding its footprint in untapped markets like automotive, healthcare and manufacturing. The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. NVIDIA expects its second-quarter fiscal 2024 revenues to reach $11 billion from $6.7 billion in the year-ago quarter, largely driven by surging AI investments across the data center end market.
Software Giants Integrating AI Tools
Salesforce forayed into the generative AI space with the launch of Einstein GPT in March 2023. Earlier this week, the company elevated the set of its generative AI tools with the launch of the AI Cloud service. With this, the company claims to offer one-stop AI-powered solutions for enterprises looking to enhance productivity.
Salesforce’s newly launched AI Cloud is a suite of services that delivers enterprise-ready real-time, open and secure generative experiences across all applications and workflows. The suite will power new capabilities across Salesforce’s products, including Einstein service, data analysis software Tableau and workplace-messaging app, Slack.
Cisco’s AI and machine learning offerings encompass a wide range of computing solutions for enterprises, including a focus on cybersecurity. The company plans to enhance customer experience solutions, devices and its video conferencing platform, Webex Suite, with ML technologies, automation and generative AI features from meeting summaries to visual enhancements.
The digital media solutions provider, Adobe, aggressively expanded its footprint in the generative AI space through partnerships and new solutions. Adobe has unveiled a family of generative AI models, Firefly, focused on the generation of texts and images. Per the company, Firefly will offer more precision, speed, power and ease in content creation. It will let users of various experience levels create high-quality images and stunning text effects.
At present, NVIDIA sports a Zacks Rank #1 (Strong Buy), while Adobe has a Zacks Rank #2 (Buy). Salesforce and Cisco each carry a Zacks Rank #3 (Hold). Shares of ADBE, CRM and CSCO have rallied 43.4%, 57.8% and 6.9%, respectively, YTD. You can see the complete list of today's Zacks #1 Rank stocks here.