For the first time, GPU manufacturer NVIDIA is worth more than Intel and has now surpassed the CPU giant as the largest US chip maker based on NASDAQ market capitalization.
NVIDIA hit the milestone on Wednesday after a recent surge saw shares rise 3.5% at $408.64 to give NVIDIA a market cap of $251.31 billion. On the other hand, Intel closed out the day with an increase of 0.5% with shares at $58.61, landing the chip giant a market cap of $248.16 billion. In layman's terms, these figures signal that the market now estimates that NVIDIA is worth more than Intel, and the company's shares are more profitable for investors.
NVIDIA's new dominance comes after significant growth over the past year. The share price rose by 74% compared to a 2% drop for Intel in the last twelve months. NVIDIA has now secured the coveted title as the biggest chip maker in the US, and by extension, the third worldwide. All this even though NVIDIA is a fabless company that doesn't manufacturer its own chips, dishing out manufacturing duties to semiconductor foundries, namely in China and Taiwan. Intel on the other manufacturers its own chips in the US, China, Ireland, and Israel.
The COVID-19 pandemic and subsequent lockdowns have aided NVIDIA's recent growth as people turn to video games for entertainment, and businesses continue with remote working measures. Additionally, the upcoming Ampere GPU has helped prop up NVIDIA's market share as the release of the highly-anticipated GeForce RTX 3000-series consumer GPUs looms on the horizon. There's considerable consumer excitement for the next-gen GPUs, which has undoubtedly fueled NVIDIA's market rise. The new line-up will help cement NVIDIA products as the GPUs of choice for the enthusiast builder market and gaming market.
Expansion beyond consumer hardware to enterprise, data centers, and AI has spurred NVIDIA's impressive recent performance as well, notably thanks to interest in NVIDIA's powerful 7nm Ampere A100 server GPUs and the DGX A100 server which boasts an impressive eight A100 GPUs, 15 TB PCIe SSD storage, 320 GB HBM2 memory, and a duo of AMD EPYC server CPUs.
This represents an impressive redressing of fortunes for the company, whose previous 2018 $281 previous share price peak was attributed to the cryptocurrency mining boom. Miners flocked to purchase NVIDIA GPUs for their mining capabilities, causing widespread shortages and price increases. The rapid growth was seen as a flash in the pan and unsustainable. Although NVIDIA suffered as the cryptocurrency bubble deflated, the company has succeeded in coming back even stronger.
While NVIDIA may have trumped Intel as the biggest US chip maker, it still trails in terms of sales. According to Reuters, NVIDIA's revenue is expected to rise 34% for the current fiscal year to reach $14.6 billion. Intel's revenue for the same period is expected to increase by 2.5% to a significantly larger $73.8 billion. NVIDIA may be valued higher, but Intel continues to lead the charge when it comes to racking in revenue from sales.
Nevertheless, the new market cap milestone signals that there is significant confidence that NVIDIA's prospects will continue to chart upwards for the foreseeable future and beyond 2020.
Head over to our buying guide if you're in the market for a new Nvidia GPU or any other components for your PC.