Wall Street, like in the gold rush due to
NVIDIA's price explosion
The era of AI promises opportunities like the launch of the Internet in the 1990s. This wave is gigantic
The largest US investment bank Goldman Sachs calls NVIDIA the most important stock in the world
Nvidia becomes number 1 in the world in terms of market value with 3.4 trillion dollars due to the AI boom
Nvidia's unbridled share price rally has made the developer of graphics processors and chipsets in the AI boom the most valuable company in the world on June 18, 2024. On the Nasdaq technology exchange, the share price peaked at $136. This brings the market capitalization to a good $3.3 trillion - more than the Windows group Microsoft and the iPhone manufacturer Apple currently have on the scales. The share price development since the beginning of the year speaks for itself: While Nvidia shares have been catapulted up by 173% by buyers this trading year, Apple and Microsoft have achieved comparatively meager share price gains of 11 and 19%.
Nvidia chips play a key role in software with AI, as they are essential for training in data centers the creative AI that generates speech and images. This is driving explosive profits, with profits increasing by a staggering 628% in the first quarter of 2024 alone, and driving Nvidia to a milestone that was once unimaginable. Microsoft is in the process of bringing AI into its products through a multi-billion dollar pact with Chat GPT founder Open AI. Apple boosted its share price by announcing new AI features such as Chat GPT for iPhone, iPad and iMac.
Rivals such as Intel or AMD have not been able to pose any significant competition to Nvidia in the market so far. Nvidia is profiting from all of this and is selling thousands of expensive chip systems to Microsoft, Google and the Facebook group Meta, among others. The jump in share price on June 18, 2016 was preceded by the announcement of a cooperation with the computer group Hewlett Packard for technology for AI use in companies.
591078% increase in value at Nvidia
since its IPO in 1999
With its march to the top, Nvidia shares are the stock with the best price performance in the past 25 years. Since its IPO in 1999, the value of the share, including reinvested dividends, has risen to an incredible 591078%. So anyone who had invested 120 euros in Nvidia shares back then would be a millionaire today. With the onset of the AI boom, the chip manufacturer started its upward flight. Since our buy signal in November 2022, when Chat GPT was introduced by Open AI and Nvidia supplied the powerful chips for it, Nvidia's share price has exploded by 1100 % x Leverage 20 = 22000 %
in just 20 months (as of June 2024) 1100 % x Leverage 50 = 55000 %
NVIDIA split its shares on June 10, 2024 in a ratio of 10 to 1
Due to the stock split, inclusion in the Dow Jones Industrial Index is only a matter of time, and the new launch of the successor chip Blackwell, which replaces the Hopper H100 and is superior in all areas, which guarantees further price potential. In August, however, Nvidia announced that the launch of the Blackwell chip would be delayed by a few months, which led to a correction at Nvidia. From the record high of $140, Nvidia also corrected to under $100 as part of a pronounced correction in the Nasdaq 100, which presented an excellent buying opportunity. We remain positive on Nvidia because they have a monopoly position in the field of AI chips and major customers such as Microsoft, Alphabet, Amazon and Meta have placed large orders for the Blackwell chip to upgrade their data centers as part of their cloud divisions. While the profits of Microsoft, Alphabet, Amazon and Meta with AI applications will only be reflected in the balance sheets in the medium term, Nvidia's rapid sales and profit growth will continue as soon as the Blackwell chip is delivered. With a return on sales of almost 70%, Nvidia is unrivaled. According to company boss Jensen Huang, production of the Blackwell chip is in full swing and demand is gigantic. The Blackwell chip is the hottest product in the technology sector. This means record sales and record profits for Nvidia in the new year.
With the start of the US Federal Reserve's interest rate cut cycle in September and the US presidential election on November 5, the seasonally best stock market phase on the US stock market also begins in November and December. After US elections, prices on the US stock markets traditionally rise because the election uncertainty is then over. Since the race for the White House is very close, a short correction could still take place in October despite current records in the Dow Jones and S&P 500. From November after the US election, the upward trend on the US stock markets will continue, which will also lead to new record highs for Nvidia this year. Currently, the fundamental market environment is one of the best in many decades, with huge profit potential.
Outlook 2025
After the US presidential election, in which Donald Trump emerged as the impressive winner, share prices initially exploded as we expected and we were able to realize outstanding profits. Nvidia reached a new all-time high of just under $152 on November 20, 2024. At the US Federal Reserve meeting in December 2024, Fed Chairman Jerome Powell announced that instead of 4 interest rate cuts, there would only be 2 interest rate cuts in 2025. The main reason was expected rising inflation due to the future tariff policy of the new President Donald Trump, which he announced shortly after his election. The US Federal Reserve's decision led to massive price losses on the US bond market and rising interest rates, which triggered a correction on the stock markets. Strong economic data from December, especially a US labor market report that was far above expectations, caused US bond market yields to continue to rise sharply, with 10-year US government bonds rising to 4.8% and soon approaching the 5% mark. As a result, US stock indices continued to fall and as part of this downward correction, Nvidia fell to $134 on January 10, 2025 after profit-taking. There is important technical support in the $127 to $132 range, which will be a good entry level. Due to the production and delivery of the Blackwell Chip, the successor to the Hopper Chip, further strong increases in sales and profits are to be expected for 2025 because the Blackwell Chip for 2025 is already sold out.
Buying zone for Nvidia in January 2025: 125 to 131 Dollar
New price target from JR Finanz Research: $180 by the end of 2025 and a market capitalization of $4 trillion.
Buy signals at NVIDIA in November 2022
The AI boom began in November 2022 with the launch of Chat GPT by Open AI. Sam Altman, the head of Open AI, predicted back then that artificial intelligence would be the next big boom in technology. This requires very special high-performance chips/semiconductors to represent the applications of AI systems. Nvidia chips are widely used in data centers that deal with AI and machine learning. The semiconductors are able to process huge amounts of data in parallel, which is crucial for training AI models such as Chat GPT. Only Nvidia supplies the high-performance chips for this and this marked the beginning of an impressive development.
The AI boom only brought the AI chip manufacturer NVIDIA to a trillion-dollar company (market capitalization) in 2023. NVIDIA develops the high-performance semiconductors required for the complex AI applications and costs up to $40,000 per chip (H100 high-performance chip). The share price has increased by almost 1100% since our long-term buy signal in November 2022. That is why NVIDIA shares are our top recommendation in the AI sector. AI is the beginning of a major investment boom that offers great profit opportunities. Rapid advances in AI, which primarily include self-learning and networked digital systems, are considered by JR Finanz Research to be the defining universal technology of the 21st century.
This is also why our long-term buy signal in November 2022, with the buy zone of 120 to 130 US dollars, performed so well.
buy signal from October 16, 2023
Since our 2nd buy signal in October 2023, NVIDIA’s share price (as of June 2024)
in just 9 months by breathtaking 420 % x Leverage 20 = 8400 %
420 % x Leverage 50 = 21000 %
Investors again bought technology stocks in particular, after chipmaker NVIDIA's latest outlook fueled bets on rising production and demand for AI products, INVIDIA reached a new all-time high of $136. Since its low of $12 on October 14, 2022, NVIDIA has risen 1100%. This development has only taken 20 months, which is another reason why investors view the stock as bulletproof, because even if the global economy loses momentum, demand for AI products will remain high and protect corporate profits from macroeconomic headwinds
After the stock game, JR Finanz Research predicts a price target of 180 dollars by 2025
market capitalization in billions of US dollars
buying signal
Nvidia before stock split
Nvidia before stock split
buying signal
Kaufsignal
buying signal
Stand: 18.06.2024
But where does Nvidia's success come from? The company was founded in 1993 and originally produced graphics accelerators. These are still used to draw computer games on gamers' monitors today. But the company has changed since then. In the fourth quarter, graphics cards only accounted for less than 15 percent of sales. Nevertheless, graphics cards are the basis for today's success. The architecture of graphics chips is special: it is built in parallel and faster in the simultaneous processing of similar processes - such as graphics - than conventional processors that are made for general tasks. This gives NVIDIA chips an advantage in autonomous image recognition, for example, which is important for autonomous driving, or in language comprehension, for the numerous digital helpers - but also for the production of cryptocurrencies or artificial intelligence. Today, NVIDIA is therefore the major supplier behind artificial intelligence. Everyone is currently salivating for one chip in particular, which costs 40,000 dollars: the H100 - called Hopper - which has triggered a real buying frenzy among the big technology companies. The biggest buyers are Microsoft and Meta, which each spent 4.5 billion dollars on the chips last year, followed by Google's parent company Alphabet, Amazon and Oracle. And Mark Zuckerberg, as Meta's boss, underlined the further demands: 350,000 chips from the H100 series are to be running in the data centers of the Facebook and Instagram groups this year alone - which alone corresponds to sales of up to 14 billion dollars. This does not include the countless other orders. The market share of NVIDIA chips is more than 80 percent.
When people say the market is doing well this year, what they really mean is that technology is doing well, and Nvidia is at the core of that. Because Nvidia is one of the few technology companies that are actually making money with generative artificial intelligence right now.
The sentence "We're going to party like it's 1995" is an example of the euphoria. That was when the internet boom began, demand and share prices rose and rose. Nvidia is only at the beginning of a multi-year cycle.
Why NVIDIA makes you jealous
The Californian chip manufacturer presents record figures, once again
Artificial intelligence is booming, and Nvidia is booming with it. Because probably no one is currently building better chips for artificial intelligence (AI) than Nvidia. According to market analysis firm Omdia, the Californian company controls around 70% of the market for the best AI processors. They are mostly manufactured in Taiwan, and Nvidia is responsible for the complex design. On February 21, 2024, the company announced its quarterly results - and surprised again: Sales rose to $22.1 billion, three times as much as in the same period last year. The growth came primarily from the data center business, which contributed $18.4 billion to sales, five times as much as in the same quarter last year. Quarterly profit shot up from $1.4 billion to just under $12.3 billion. Nvidia's market dominance is unbroken. Founder and CEO Jensen Huang, usually in a black leather jacket, can be satisfied.
At the headquarters of Microsoft, Google and Amazon, they are eyeing this success with envy. The tech companies have huge amounts of data, but they need Nvidia's chips to train AI software. In addition, many of them earn money from so-called cloud computing: They rent computing capacity from their data centers to companies so that they don't have to build expensive infrastructure themselves. In order for the data centers to be suitable for AI training, they also need the best chips - and these come from Nvidia. By expanding their own chip production, the tech companies are walking a fine line. They are both customers and competitors of Nvidia.
Even the very large corporations are dependent on Nvidia
Nvidia has a big lead. Huang founded the company in 1993 together with chip designers Chris Malachowsky and Curtis Priem. They soon began producing a specific type of chip: graphics processors, which are actually intended for computer games. Conventional processors (CPUs) are perfect at calculating one complex task after another.
Graphics cards (GPUs) excel at processing many simple tasks in parallel. If you have several of these graphics cards, the real trick comes: you can connect them together and build a supercomputer for special calculations - like the huge amounts of calculations that underpin even the most powerful AI models.
Nvidia was the first to discover the hidden potential of graphics cards. The company sells so many of them that it can hardly keep up with production.
The chips, says multi-billionaire Elon Musk, are currently harder to get hold of than drugs.* Nvidia is the number one dealer in this scenario. 'If I want to develop AI models at the highest level, then I need Nvidia.
Investors are also realizing this: Nvidia is now worth more than Amazon and Google's parent company Alphabet. Open-Al boss Sam Altman would also like to have what Nvidia has. He is behind the well-known chatbot Chat-GPT. Privately, he is said to have asked investors for a whopping seven trillion dollars to set up his own chip production, reports the Wall Street Journal. Shortly afterwards, he tweeted casually:
"Screw it, make it eight." This shows the scale on which insiders think about the industry. And what they would spend to challenge Huang's company's position.
NVIDIA - a stock that drives everyone to new records
After 34 years, the Japanese leading index Nikkei 225 reached its old record level for the first time on Thursday, February 22, 2024. The German leading index Dax also rose to a new high right at the start of trading, before the US leading index S&P 500 also set a record at 3:30 p.m. local time in the afternoon. The land of the rising sun gave the global stock markets the impetus, and the records followed until sunset.
Even though these stock exchanges are thousands of kilometers apart, they have moved surprisingly close together in other ways: Regardless of whether Japan has been suffering from its anemic economy for years, Germany recently slipped into recession and the Americans surprised with comparatively good economic data - we owe this week's price rush mainly to one single topic: like a spotlight, all the attention is focused on it.
The magic word? Artificial intelligence. Stock market strategist Scott Rubner from the investment bank Goldman Sachs needed just six words to put the euphoria into words. The shares of chip manager NVIDIA are currently "the most important shares on the planet," Rubner wrote in a paper to his clients. After the company presented its quarterly figures on Wednesday evening, the company's market value increased by 277 billion dollars on Thursday. No company has ever made that much in a single day, according to calculations by the financial service Bloomberg. The chip company's sales more than tripled compared to the same quarter last year, profits even increased ninefold, and exceeded even the wildest expectations of analysts. There is great demand, especially for NVIDIA's special chips for artificial intelligence. Now the company is taking the entire world's stock markets with it.
In fact, the major stock market indices often owe their gains to just a handful of stocks. In the USA, there is now talk of the "Super Six" - stocks such as NVIDIA, Facebook's parent company Meta, Microsoft and Alphabet, which accounted for almost all of the stock market gains of the leading index S&P500.
In Japan, the investment bank JP Morgan recently recommended the "Seven Samurai" to its clients: In addition to the large corporations Toyota and Subaru, this list also includes numerous chip suppliers. The fact that the most important stocks on the stock exchange have been becoming increasingly important in recent months has consequences for the entire market. In leading indices such as the DAX or the S&P500, not every stock is represented with the same weight; instead, stock exchanges rank them primarily by market value - i.e. how much all of a company's de facto tradable shares are worth together.
Artificial Intelligence: Nvidia announces new computer system for AI infrastructure
The chip company Nvidia wants to expand its leading role in artificial intelligence technology. Company boss Jensen Huang presented a new generation of Nvidia's computer platform. Nvidia sees the system, called Blackwell, as "driving a new industrial revolution" through AI. The system is four times more powerful than the current generation Grace Hopper when it comes to learning artificial intelligence.
Nvidia's computer systems dominate in data centers when it comes to AI training. The company also wants to expand its role in generating content using artificial intelligence. The "Blackwell" system is 30 times better than "Hopper" in this regard, Huang emphasized on Monday at the company's own developer conference GTC in San Jose. Nvidia also has new software for this that can also be used via interfaces via the cloud.
Huang was convinced that in the future most content will not be retrieved pre-made from storage, but that AI software will generate it fresh based on the current situation. Nvidia developed the computer system for this future. For example, you will be able to talk to buildings using a chatbot instead of looking at data somewhere.
With Grace Hopper, for example, you could have trained the chatbot ChatGPT within three months with 8,000 Nvidia chips and a power consumption of 15 megawatts, said Huang. With Blackwell, you can do the same in the same amount of time with 2,000 chips and 4 megawatts of power.
A chip for the price of a car
Over the years, Nvidia has blossomed from a graphics specialist to a small-scale leader. It should upgrade significantly in terms of software and set new standards in terms of hardware. The company is developing electronic components that have never existed before: not in terms of size, not in terms of price and not in terms of performance. All eyes have just turned to Nvidia's founder and CEO Jensen Huang when he presented the next generation of chips on March 18, 2024.
The chocolate bar-sized electronic wonder components are a new type of super chip. They have the price tag of a decent mid-range car and can not only calculate faster or process more data than entire supercomputers. They are also generally believed to trigger a new industrial revolution. This puts Nvidia at the forefront of the entire tech industry.
Driven by demand for chips for training and operating highly complex artificial intelligence (AI) systems, Nvidia has experienced breathtaking growth in recent years, more than tripling its quarterly revenue and increasing its net profit more than eightfold. The share price shot through the roof. The company is now worth $2.2 trillion on the stock market, more than Facebook's Meta group. Only Microsoft and Apple are ahead of Nvidia in terms of market capitalization.
At the moment, there are no equivalent alternatives for these AI chips.
In 2023, around $53 billion was generated with this type of chip; this year it could be almost $70 billion.
Analysts at Goldman Sachs predict that the market for AI semiconductors will double to around $140 billion by 2027.
Nvidia's dominance is unbroken.
Nvidia's market share in AI chips is currently 70 percent. Companies like Meta, Microsoft and Alphabet report that they would have expanded or built their AI data centers more quickly if they had had enough Nvidia chips available. Production is running at full speed, but it cannot keep up with the sharp increase in demand. Nvidia CEO Jensen Huang is already talking about how he could distribute the scarce chips as fairly and evenly as possible among his customers.