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Nvidia Joins the Trillion Dollar Club

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Chart showing Nvidia surpassing the $1 trillion market cap milestone becoming the eighth company to join that club

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Nvidia Joins the Trillion Dollar Club

Chipmaker Nvidia is now worth nearly as much as Amazon.

America’s largest semiconductor company has vaulted past the $1 trillion market capitalization mark, a milestone reached by just a handful of companies including Apple, Amazon, and Microsoft. While many of these are household names, Nvidia has only recently gained widespread attention amid the AI boom.

The above graphic compares Nvidia to the seven companies that have reached the trillion dollar club.

Riding the AI Wave

Nvidia’s market cap has more than doubled in 2023 to over $1 trillion.

The company designs semiconductor chips that are made of silicon slices that contain specific patterns. Just like you flip an electrical switch by turning on a light at home, these chips have billions of switches that process complex information simultaneously.

Today, they are integral to many AI functions—from OpenAI’s ChatGPT to image generation. Here’s how Nvidia stands up against companies that have achieved the trillion dollar milestone:

Joined ClubMarket Cap
in trillions
Peak Market Cap
in trillions
AppleAug 2018$2.78$2.94
MicrosoftApr 2019$2.47$2.58
AramcoDec 2019$2.06$2.45
AlphabetJul 2020$1.58$1.98
AmazonApr 2020$1.25$1.88
MetaJun 2021$0.68$1.07
TeslaOct 2021$0.63$1.23
NvidiaMay 2023$1.02$1.02

Note: Market caps as of May 30th, 2023

After posting record sales, the company added $184 billion to its market value in one day. Only two other companies have exceeded this number: Amazon ($191 billion), and Apple ($191 billion).

As Nvidia’s market cap reaches new heights, many are wondering if its explosive growth will continue—or if the AI craze is merely temporary. There are cases to be made on both sides.

Bull Case Scenario

Big tech companies are racing to develop capabilities like OpenAI. These types of generative AI require vastly higher amounts of computing power, especially as they become more sophisticated.

Many tech giants, including Google and Microsoft use Nvidia chips to power their AI operations. Consider how Google plans to use generative AI in six products in the future. Each of these have over 2 billion users.

Nvidia has also launched new products days since its stratospheric rise, spanning from robotics to gaming. Leading the way is the A100, a powerful graphics processing unit (GPU) well-suited for machine learning. Additionally, it announced a new supercomputer platform that Google, Microsoft, and Meta are first in line for. Overall, 65,000 companies globally use the company’s chips for a wide range of functions.

Bear Case Scenario

While extreme investor optimism has launched Nvidia to record highs, how do some of its fundamental valuations stack up to other giants?

As the table below shows, its price to earnings (P/E) ratio is second-only to Amazon, at 214.4. This shows how much a shareholder pays compared to the earnings of a company. Here, the company’s share price is over 200 times its earnings on a per share basis.

P/E RatioNet Profit Margin (Annual)
Apple30.225.3%
Microsoft36.136.7%
Aramco13.526.4%
Alphabet28.221.2%
Amazon294.2-0.5%
Meta33.919.9%
Tesla59.015.4%
Nvidia214.416.19%

Consider how this looks for revenue of Nvidia compared to other big tech names:

For some, Nvidia’s valuation seems unrealistic even in spite of the prospects of AI. While Nvidia has $11 billion in projected revenue for the next quarter, it would still mean significantly higher multiples than its big tech peers. This suggests the company is overvalued at current prices.

Nvidia’s Growth: Will it Last?

This is not the first time Nvidia’s market cap has rocketed up.

During the crypto rally of 2021, its share price skyrocketed over 100% as demand for its GPUs increased. These specialist chips help mine cryptocurrency, and a jump in demand led to a shortage of chips at the time.

As cryptocurrencies lost their lustre, Nvidia’s share price sank over 46% the following year.

By comparison, AI advancements could have more transformative power. Big tech is rushing to partner with Nvidia, potentially reshaping everything from search to advertising.

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Mapped: The World’s Top 50 Science and Technology Hubs

This map explores the world’s top 50 science and technology hubs based on the Global Innovation Index 2023 data.

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This map explores the world’s top 50 science and technology clusters, based on data from the Global Innovation Index 2023.

The World’s Top 50 Science and Technology Hubs

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

In 2023, the world experienced another wave of science and technology (S&T) innovation, from the introduction of the first over-the-counter birth control pill in the U.S. to the stunning growth of ChatGPT and artificial intelligence.

This map explores the world’s top 50 science and technology hubs leading these innovations based on data from the Global Innovation Index 2023. Hubs were ranked by their combined share of international patent applications and scientific publications.

East Asia Dominance in S&T

The world’s five most significant science and technology hubs are in East Asia.

The top-ranked Tokyo-Yokohama cluster made up just over 10% of all patent applications between 2018-2022.

ClusterCountry/EconomyPatent ApplicationsScientific Publications
Tokyo-Yokohama🇯🇵 Japan127,418115,020
Shenzhen-Hong Kong-Guangzhou🇨🇳/🇭🇰 China/Hong Kong113,482153,180
Seoul🇰🇷 South Korea63,447133,604
Beijing🇨🇳 China38,067279,485
Shanghai-Suzhou🇨🇳 China32,924162,635
San Jose-San Francisco🇺🇸 U.S.47,26958,575
Osaka-Kobe-Kyoto🇯🇵 Japan38,41351,948
Boston-Cambridge🇺🇸 U.S.18,18476,378
San Diego🇺🇸 U.S.23,26120,928
New York City🇺🇸 U.S.13,83874,849
Nanjing🇨🇳 China7,143113,488
Paris🇫🇷 France15,17661,692
Wuhan🇨🇳 China6,25089,756
Hangzhou🇨🇳 China10,75562,924
Nagoya🇯🇵 Japan17,73616,091
Los Angeles,🇺🇸 U.S.11,55644,058
Washington, DC–Baltimore🇺🇸 U.S.5,52576,039
Daejeon🇰🇷 South Korea12,27525,552
Xi'an🇨🇳 China1,78686,937
London🇬🇧 Great Britain5,98159,068
Seattle🇺🇸 U.S.11,47220,322
Munich🇩🇪 Germany10,24824,239
Qingdao🇨🇳 China7,28639,745
Chengdu🇨🇳 China2,04667,334
Cologne🇩🇪 Germany7,46634,286
Amsterdam–Rotterdam🇳🇱 Netherlands4,23052,864
Taipei–Hsinchu🇹🇼 Taiwan3,90752,752
Houston🇺🇸 U.S.8,47524,636
Stuttgart🇩🇪 Germany9,34214,874
Tel Aviv–Jerusalem🇮🇱 Israel7,26824,219
Moscow🇷🇺 Russia2,03655,086
Chicago🇺🇸 U.S.5,76332,343
Singapore🇸🇬/🇲🇾 Singapore/Malaysia4,86136,803
Tehran🇮🇷 Iran24963,113
Philadelphia🇺🇸 U.S.5,39032,309
Tianjin🇨🇳 China1,26753,680
Changsha🇨🇳 China1,14952,768
Stockholm🇸🇪 Sweden6,06919,984
Minneapolis🇺🇸 U.S.6,62515,375
Hefei🇨🇳 China2,54938,974
Eindhoven🇳🇱 Netherlands7,9825,339
Melbourne🇦🇺 Australia2,12640,056
Berlin🇩🇪 Germany3,62430,464
Chongqing🇨🇳 China1,65141,412
Frankfurt am Main🇩🇪 Germany5,41018,590
Sydney🇦🇺 Australia2,53933,695
Raleigh🇺🇸 U.S.3,05730,206
Madrid🇪🇸 Spain1,58038,849
Zürich🇨🇭 Switzerland3,75924,437
Milan🇮🇹 Italy2,57831,077

The first American cluster on the list, the San Francisco Bay Area, is home to major tech companies such as Adobe, eBay, Google, and PayPal.

Along with Cambridge in the United Kingdom, the San Francisco Bay Area is one of the most S&T-intensive clusters relative to overall population density.

For the first time, China topped the list of countries with the highest number of clusters among the top 100, having 24 total. The United States follows, with 21 clusters, then Germany with nine.

In addition, nearly every Chinese cluster rose in the rankings compared to last year, with only Beijing falling by one place.

São Paulo (Brazil); Bengaluru, Delhi, Chennai, and Mumbai (India); Tehran (Islamic Republic of Iran); Istanbul and Ankara (Türkiye); and Moscow (Russian Federation) are the only middle-income economy clusters outside China.

According to the Global Innovation Index, the U.S. leads in research and development (R&D) expenditure, followed by China, Japan, Germany, and the Republic of Korea.

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