Total return rate of 591078%! NVIDIA's market value tops the world, AI welcomes the "iPhone moment"?

According to the Zhītōng Finance and Economics APP, Knox Ridley, the portfolio manager of Tech Insider Network, stated on Tuesday that chip giant NVIDIA (NVDA.US) will dominate the artificial intelligence (AI) market, just like how Apple (AAPL.US) once ruled the smartphone industry. On the same day Ridley made the above statement, NVIDIA surpassed Apple and Microsoft (MSFT.US) to become the world's largest publicly traded company by market capitalization.

Tech Insider Network predicts that by 2030, NVIDIA's market capitalization will reach $10 trillion.

Ridley elaborated on the reasons why he is bullish on NVIDIA. He mentioned that this chip manufacturer has the same advantage as Apple did when it released the iPhone in the early 21st century. In other words, AI technology developers will focus on existing mainstream technologies, just like how programmers quickly began to rely on Apple's operating system.

Ridley said, "The guard in front of us is changing." He believes that NVIDIA will be at the forefront of the new wave of technology focused on artificial intelligence.

Ridley stated, "We are in the early stages of this micro-trend."

It is understood that in March of this year, Huang Renxun declared that "the iPhone moment of AI is coming," indicating that the AI industry has reached a revolutionary tipping point similar to when the iPhone revolutionized the smartphone industry.

As of the close of trading on Tuesday, NVIDIA rose by 3.51%, with a market capitalization of $3.34 trillion. It is worth noting that just over a year ago, the company's market capitalization had not yet reached the $1 trillion mark, ranking behind tech giants such as Google's parent company Alphabet, Amazon, Apple, and Microsoft.

NVIDIA's astonishing comeback: From Nasdaq rookie to market leader

Looking back to 1999, shortly after Steve Jobs returned to lead Apple, the relatively unknown chip manufacturer NVIDIA made its debut on the Nasdaq Stock Exchange.

In less than three years, NVIDIA replaced the infamous energy trading group Enron and became a component stock of the S&P 500 Index.

Nevertheless, few dared to bet that the company would become the best-performing stock in the past 25 years. Since its initial public offering (IPO), NVIDIA's total return, including reinvested dividends, has been 591,078%. This is a staggering figure, to some extent proving that the financial frenzy surrounding artificial intelligence is brewing, and investors see NVIDIA as the biggest winner of the AI boom.

However, NVIDIA's path to success was not without challenges.

From its IPO to being included in the S&P 500 Index, the company's stock price has risen by over 1600%, with a market capitalization of approximately $8 billion. Meanwhile, the internet bubble peaked in March 2000, and many other tech stocks plummeted after the bubble burst NVIDIA will not have an easy time in the next 6 years. In 2008, weakened demand due to the financial crisis and long-struggling competitor AMD (AMD.US) began to turn the tide, causing NVIDIA's stock price to plummet.

At the same time, the agreement between NVIDIA and Intel (INTC.US) to allow each other to use their respective functions fell through, forcing NVIDIA to withdraw from one of its largest markets. The two companies reached a settlement in 2011, with Intel agreeing to pay NVIDIA $1.5 billion.

The following year, NVIDIA introduced graphics chips for data center servers. They could assist in complex calculations such as oil and gas exploration and weather forecasting, allowing NVIDIA to establish a foothold in this lucrative market. However, these chips did not sell well immediately. It took nearly 9 years for NVIDIA's stock price to surpass its 2007 high.

In 2015, NVIDIA's stock price soared again. During this time, the company's chips were becoming the foundation for emerging technologies including autonomous vehicles and artificial intelligence.

Even after the demand from cryptocurrency miners dried up, data center sales continued to grow. From the 2017 fiscal year to the 2021 fiscal year, NVIDIA's data center revenue increased 8 times.

In 2022, NVIDIA's stock price plummeted along with other tech stocks, which struggled after prospering in the era of the COVID-19 pandemic due to rising interest rates and declining demand.

OpenAI released ChatGPT at the end of 2022, causing a sensation immediately, but it took investors some time to realize that NVIDIA might benefit from it. Ultimately, the surge in interest in ChatGPT and other generative artificial intelligence products led to a sharp increase in NVIDIA chip orders.

"Their position in the industry is very stable," said Rhys Williams, Chief Strategist at Wayve Capital Management. "Obviously, they won't always hold a 95% market share, but it's almost impossible for anyone to replace them."