Nvidia ( NVDA ) stocks hit new highs on Friday, as the AI craze continues into early 2024. Shares of Nvidia jumped more than 2% to $584.87 by midday. Shares of the AI juggernaut are up some 18% in the first few weeks of the new year and 179% over the past 12 months. And its market cap is fast approaching $1.5 trillion.
But Nvidia isn’t the only company benefiting from the AI hype. Rival AMD ( AMD ) touched an intraday high of $168.60 per share on Thursday. The chipmaker is up 94 percent over the past 12 months. Shares of Intel ( INTC ) rose 57% during the same period.
Nvidia received a huge vote of confidence on Thursday when Meta ( META ) CEO Mark Zuckerberg announced that the company is spending billions of dollars to acquire thousands of Nvidia chips for its AI projects. In an Instagram Reels post, Zuckerberg said Meta will build a complete AI infrastructure with 350,000 Nvidia H100 chips by the end of 2024 aimed at developing general artificial intelligence.
Zuckerberg also said he wants to make Meta’s general AI open source, allowing others to use and work with it.
Nvidia is the world leader in AI chip development, with an estimated share of between 70% and 90% of the global market. But it’s not just Nvidia’s hardware that helps it stay ahead of its competitors. The company’s Cuda software, which developers use to build AI platforms, also serves as a moat that keeps Nvidia above the fray.
That said, Nvidia’s rivals are gathering to grab market share. In December, AMD debuted its MI300 accelerator, designed to go head-to-head with Nvidia’s data center accelerators. Intel, meanwhile, is building its own Gaudi3 AI accelerator, which will also compete with Nvidia’s offerings.
It’s not just AMD and Intel though. Hyperscalers, including cloud service providers Microsoft ( MSFT ), Google ( GOOG , GOOGL ) and Amazon ( AMZN ), as well as Meta, are increasingly turning to the chips they use to power their AI accelerators. Preparing themselves to give strength. Known as ASICs or Application Specific Integrated Circuits.
Consider AI graphics accelerators from Nvidia, AMD, and Intel to be jacks of all trades. They can be used for a variety of AI-related tasks, ensuring that whatever a company needs, the chips can handle it.
ASICs, on the other hand, are masters of the same trade. They are designed specifically for a company’s own AI needs and are often more efficient than graphics processing units from Nvidia, AMD and Intel.
This is a problem for Nvidia, as hyperscalers tend to be expensive when it comes to AI GPUs. But as ASICs begin to take hold, they may need less of Nvidia’s chips.
Still, the AI explosion is just beginning. And the vast majority of companies that will benefit from AI have yet to get into the game. In other words, there’s still plenty of room to grow. Even if Nvidia’s market share suffers, its revenue will continue to grow as the AI space continues to gain momentum.
For now, though, Nvidia remains the AI king.
Daniel Hawley is the Tech Editor at Yahoo Finance. He has been covering the tech industry since 2011. You can follow him on Twitter. @DanielHowley.
Click here for the latest technology news that will impact the stock market.
Read the latest financial and business news from Yahoo Finance