Bravo NVidia

Absolutely Amazing Work

There’s an old saying: when there’s a gold rush, don’t dig for gold - sell pick axes.

NVidia, almost alone, creates all of the hardware necessary for the current AI boom. Do they train AI? No. Do they sell AI? No. But do they enable AI? Hell yes.

Without Nvidia, there would be no AI as we know it.

I remember a lot of the last 20 years when Nvidia mostly was known for making gaming graphics cards. They and AMD would trade first place. It was great fun.

Interestingly, the same technology behind graphics cards is what powers both the training and the responses of AI. Nvidia has remade itself very quickly into a company that makes most of its revenue selling hyper advanced AI cards (that are really just souped up graphics cards) in special form factors for datacenter. The computers that train models like GPT-4o are powered by thousands of advanced cards and servers all made by Nvidia.

Today, Nvidia released their latest earnings and man, it’s impressive. In Q1 of 2023, they sold $7.19 billion in hardware and services. Just a year later in the same quarter, they sold $26.04 billion. That’s a jump of almost 400% in a year.

What’s even more impressive is their gross margin is 78% and their net profit, in a single quarter, was $15 billion!

And they only spent $2.7 billion on research and development.

To begin with, these are astonishing numbers that show Nvidia has a solid hold on the AI world. They are it at the moment despite AMD and Intel trying their best to catch up. Someday a great business school case study will be written on how Nvidia left Intel and AMD far, far behind. To give you an idea, Intel’s market cap is $133 billion.

Nvidia’s is $2,300 billion.

They aren’t even in the same ballpark anymore. It’s disrespectful to put them in the same sentence.

What’s most impressive is that Nvidia actually managed to scale up their operations so much in a single year. Their chips are actually made by TSMC with machines made by ASML. How Nvidia worked with TSMC to ship so much product is incredible to me.

Even more, the founder of Nvidia is still the CEO. What a brilliant man to be able to foresee the future and adapt and grow so much. My hats off to him.

NVidia’s stock just hit over $1,000 a share for the first time. It’s only a matter of time before Jensen Huang is the richest person in the world. And I don’t think he’s stopping anytime soon.