Nvidia is a US technology company that serves the semiconductor, automotive, mobile computing, construction, and gaming markets. It was founded in 1993 by electrical engineers Jensen Huang, Curtis Priem, and Chris Malachowsky, with Huang still serving as CEO and President. It has headquarters in Santa Clara, California and is incorporated in Delaware.
The business was created with the belief that, one day, the personal computer (PC) would become a consumer device for video games and multimedia. At the time of inception, there were only around 20 graphics chips companies, giving Nvidia a fairly innovative premise.
What is its role in the semiconductor industry?
Nvidia designs graphics processing units (GPUs), system on a chip units (SoCs), and central processing units (CPUs), which are then sold to chipmakers such as Taiwan Semiconductor Manufacturing Company (TSMC) for manufacturing within high-quality facilities. The company also provides information on how to power, connect, and cool the GPUs. These GPUs can be used for a wide range of products, including video games, robotics, healthcare devices and equipment, supercomputers, autonomous/driverless cars, and cloud services.
Although it’s primarily a company involved in semiconductor designs, it also focuses on software sales, development, and hardware licensing. The semiconductor industry is highly competitive and currently expected to grow at a rate of over 25% per year, according to Statista.
A timeline of NVDA’s products and services
1995-2000: Nvidia’s first product was the NV1, a multimedia card featuring a 2D/3D graphics core used by video game leader Sega in its first 3D video game. The company invented the world’s first graphics processing unit (GPU), the GeForce 256, blazing a trail that competitors would follow. The company debuted on the Nasdaq exchange in New York.
2001-2010: It entered the integrated graphics market with its nForce platform, a programmable GPU. The business earned $1bn in revenue and was added to the S&P 500 index. It created its Compute Unified Device Architecture (CUDA) platform for general purpose GPU computing, and it also shipped its 500 millionth graphics processor. The company launched 3D Vision, the world's first high-definition 3D stereo solution for the home, and also worked with Siemens to create the world’s first 3D ultrasound. Nvidia’s GPUs were used to power the world’s fastest supercomputer, Audi’s vehicles, and blockbuster films.
2011-2020: By 2011, the company had shipped over one billion graphics processors worldwide. The business launched Tegra 2, the world’s first dual-core mobile processors, which the first Android tablets were built on. The Tegra K1 was another superchip that brought the DNA of the world’s fastest GPU to mobile devices. NVDA used artificial intelligence (AI) to enter the autonomous vehicle market, as well as powering deep-learning machines, drones, robots, and smart cameras.
2021 onwards: It has become one of the world’s largest and most valuable semiconductor companies, with powerful and flexible data centres and various acquisition plans for the future.
Nvidia refers to itself as “The AI Computing Company” with more than 50 offices across the Americas, Asia, Europe, and the Middle East. It has over 18,000 employees. More than 2.5 million developers and 8,500 start-ups use the company’s applications and services, including researchers, developers, and scientists.
A dominant leader in the discrete GPU market, it has an approximate market share of 83%, according to Statista. This is despite competition from Advanced Micro Devices (AMD), Intel, and others. In the field of PC GPUs, it has a market share of around 20%.
How has Nvidia stock performed over the years?
Nvidia is listed on the Nasdaq exchange in New York under the ticker NVDA. It’s a constituent of the blue-chip Nasdaq 100 and S&P 500 stock indices, and is one of the largest companies in the world by market capitalisation.
In 1999, the company listed on the Nasdaq exchange for $12 a share. Since then, Nvidia’s share price has risen by 2,650%, reaching an all-time high of over $333 in November 2021. The release of the company’s record-breaking Q3 results that year contributed to a 28% single-day jump in the company’s share price.
In September 2020, the company announced plans to acquire British semiconductor company and SoftBank subsidiary Arm for $40bn, which would’ve been the largest deal in the industry to date. In the months following the announcement, NVDA’s share price made rapid gains and continued to soar during the Covid-19 pandemic, increasing Arm’s value to around $66bn. However, the deal collapsed at the start of 2022 amid strong opposition from competitors and governmental bodies.
Although tech stocks took a tumble at the start of 2022, largely due to concerns about higher interest rates and inflation, as well as a jump in bond yields, Nvidia is expected to bounce back in the near future. The global chip shortage and the company’s role in developing the metaverse could help to offset any risks that may come with the technology and semiconductor markets.
When did Nvidia’s stock split?
The company has carried out five stock splits in its history as a publicly traded company: in 2000, 2001, 2006, 2007, and 2021. The company said it split its stock to make the per-share price more accessible to investors and employees.
For the first three splits, it split its stock on a two-for-one basis, meaning that for every share of NVDA owned before the split, the shareholder received two shares.
In 2007, it split its stock on a three-for-two basis, meaning that for every 2 NVDA shares owned before the split, the shareholder got three shares.
The most recent stock split in 2021 was a four-for-one split, meaning shareholders received four shares for every share that they owned. The price of the existing shares was divided by four, making each share cheaper than before.
See also Renalytix AI (LSE:RENX), Verve Therapeutics (NASDAQ:VERV), Medtronic (NYSE:MDT).
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