The Rise of NVIDIA in 5 Charts

Artificial intelligence has been the talk of the markets this year. NVIDIA (NVDA) has been selling the proverbial picks and shovels to the AI gold rush, resulting in the Santa Clara-based chipmaker skyrocketing 221% year-to-date.

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After reporting earnings on August 23rd, the stock soared as much as 9% after hours following guidance that the company would increase its YoY sales by 170% in the next quarter. The guidance led to most analysts reiterating or upgrading their ratings on NVIDIA to buy, with many raising their price targets. 

With even more buzz surrounding 2023’s buzziest name, here are five charts that explain NVIDIA’s journey to today:

• NVIDIA’s Growth to $1 Trillion in Market Cap
• NVIDIA’s Performance Since its IPO
• NVIDIA’s Lost Half Decade
• NVIDIA in the Last 20 Years
• What’s Driving NVIDIA’s Success today

NVIDIA’s Growth to $1 Trillion in Market Cap

In June 2023, NVIDIA joined an elite group of companies with a valuation of at least  $1 trillion.  After reporting its earnings, the company is now comfortably above the trillion-dollar market cap milestone and is currently the world’s 5th-largest publicly traded company. 

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NVIDIA has been at the forefront of technological advancements, specifically with graphics processing units (GPUs) for gaming and professional markets. Over the years, the company has expanded its product offerings and found a way to be a key player in new and emerging markets, such as AI and autonomous vehicles.

NVIDIA’s Performance Since its IPO 

Since its IPO on January 22, 1999, NVIDIA’s total return is over 61,000%, translating into a 30% annualized return. This phenomenal growth reflects the company’s ability to innovate and adapt in a rapidly evolving technological landscape.

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NVIDIA’s Lost Half-Decade 

Not everything has been up-and-to-the-right for NVIDIA. If you zoom into the company’s early days as a publicly traded company, the company suffered from a lost half-decade despite significant spikes in the early 2000s. Like many tech companies during this period, NVIDIA faced numerous challenges, including economic downturns, increased competition, and technological shifts.

Despite the technological advancements made during these years, the company struggled to translate these innovations into consistent financial gains, leading to a stagnant period for its stock price.

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NVIDIA in the Last 20 Years

Following the ‘lost half-decade,’ the company and its investors experienced a dramatic reversal of fortune.  From August 2004 to today, the company has propelled 39.5% on an annualized basis to deliver 56,930% in price change alone. 

A considerable portion of these returns was accumulated in the mid-2010s when companies around the globe began conceptualizing the next iteration of the internet. This required the advanced capabilities of NVIDIA’s chips. This period marked a pivotal transition for NVIDIA as it evolved from being primarily a manufacturer of GPUs for gaming to becoming a key player in various other sectors, including AI, data centers, and autonomous vehicles.

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What’s Driving NVIDIA’s Success Today

For most of NVIDIA’s history, their GPU chips were limited to gaming purposes. As of November 2021, the company’s total revenue was $7.1 billion—gaming made up 45% of it ($3.22B), while the data center segment comprised 41%. 

Today, with the advent of Artificial Intelligence, the primary driver of NVIDIA’s revenue comes from the Data Center segment. Per their last earnings report, data center revenue grew to 76% of NVIDIA’s $13.5B overall top line. 

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As more companies adopt artificial intelligence, NVIDIA’s “three-chip strategy” data center architecture is the go-to solution for AI model training. Housed within NVIDIA’s advanced data centers are a range of cutting-edge chips, including the H100, which according to NVIDIA, delivers performance that is nine times more efficient than its predecessor and is essential in building large language models (LLMs) like ChatGPT and BARD. 

Use YCharts to Find Funds with NVIDIA Exposure

It’s no secret that NVIDIA’s performance has put several indices, index funds, and thematic funds on its back this year. You can use the YCharts Fund Screener to easily identify funds with the most NVIDIA exposure. Once in the Fund Screener, use the “Security Exposure” filter to find the funds that best satisfy your level of appetite for NVIDIA.

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