Nvidia (NVDA), the dominant force in the A.I. chip market, achieved a significant milestone on June 6 when its market capitalization soared past $3 trillion for the first time, overtaking Apple (AAPL) to become the world’s second most valuable publicly traded company, just behind Microsoft (MSFT). This development coincided with Nvidia’s impending 10-for-1 stock split scheduled for June 7, aimed at reducing the per-share price by 90% to enhance accessibility to its stock.
According to Nvidia, this stock split won’t alter its market capitalization or core business metrics but is anticipated to spur short-term gains in its stock price. As described, “After the split, one $1,200 Nvidia share will become ten $120 shares.”
Nvidia’s remarkable ascent, under the leadership of Jensen Huang, has been driven by its H100 graphics processing units (GPUs), which form the backbone of advanced A.I. models. In the first quarter alone, Nvidia reported an astounding 628% rise in profit and a 268% increase in revenue year-over-year, underscoring its meteoric growth trajectory.
Major tech giants like Microsoft and Meta have emerged as pivotal customers for Nvidia’s H100 chips. Analysts at DA Davidson revealed that Microsoft and Meta collectively spent $9 billion on these accelerators in 2023, with both companies acquiring an estimated 150,000 chips each. Looking ahead, Microsoft aims to accumulate approximately 1.8 million GPUs by the end of 2024, largely sourced from Nvidia. Similarly, Meta announced plans earlier this year to purchase 350,000 H100 GPUs from Nvidia, supporting its ambitious A.I. projects like the Llama 3 language model, which reportedly utilized a cluster of 24,000 H100 GPUs.
Google and Amazon are also significant clients, each procuring about 50,000 Nvidia chips last year. Combined with Microsoft and Meta, these tech giants contribute nearly 40% of Nvidia’s revenue, according to Bloomberg. Amazon recently outlined its strategy to enhance its AWS cloud service as the premier platform for Nvidia GPUs, facilitating advanced generative A.I. capabilities.
Beyond the tech behemoths, Nvidia’s business extends to various cloud service providers and Chinese tech giants like Tencent, Baidu, Alibaba (BABA), and ByteDance (the parent company of TikTok). Tesla (TSLA) is another prominent customer, reportedly purchasing 15,000 A.I. chips from Nvidia in 2023. Tesla’s CEO Elon Musk disclosed plans to ramp up their usage significantly, aiming to expand the active deployment of H100s from 35,000 to 85,000 by year-end. Notably, logistical issues prompted Musk to divert 12,000 chips originally slated for Tesla to his social media venture X (formerly Twitter).
In March, Nvidia introduced its next-generation A.I. chip, Blackwell, slated for release later this year. During Nvidia’s earnings call, it was revealed that major players like Microsoft, Meta, Google, Amazon, Oracle, Tesla, xAI, and OpenAI are lined up as early adopters of this cutting-edge technology. Looking ahead, Nvidia’s CEO Jensen Huang unveiled plans for subsequent innovations, including the Blackwell Ultra in 2025 and a new A.I. chip platform named Rubin scheduled for 2026, underscoring Nvidia’s commitment to annual upgrades of its A.I. accelerators.
