Nvidia Surged 260,000% Since Listing in 1999, But a Lot Has Changed Since Then
Nvidia’s stock price has exploded in the last two years. | Credit: Justin Sullivan / Getty Images.
Key Takeaways
- Nvidia’s stock price has exploded since 1999.
- Since its early days of making graphics cards for consoles and computers, Nvidia has become the world’s main supplier of data center GPUs.
- Nevertheless, the company faces ongoing challenges that could dampen its continued growth.
Nvidia’s stock price has grown more than 260,000% since its initial public offering (IPO) in 1999. Priced at $12 per share at the time of its IPO, Nvidia’s stock hit the equivalent of nearly $40,000 at its latest peak in August (or $130 per share, as NVDA has been subject to multiple stock splits over the years).
The company’s meteoric ascent can be attributed to being in the right market at the right time. First, Nvidia rode the video game wave of the early 2000s, and then, in more recent times, it has benefited from an explosion of investment in AI.
The Nvidia Story: 1999 to 2024
Nvidia was founded in 1993 by Jensen Huang, Curtis Priem, and Chris Malachowsky—three chip industry veterans who had experience working at AMD, LSI Logic, and IBM.
The company’s basic premise was simple: to develop new types of processors that could handle the heavy work of rendering graphics.
1993-1999: The Startup Years
Originally oriented toward the console market, Nvidia started making graphics cards for personal computers in the late nineties.
The same year it went public, the company released the GeForce 256, its first commercially successful product that helped popularize the term graphics processing unit (GPU).
2000-2012: GPU Success
Between 2000 and 2012, Nvidia became a dominant force in both the PC and console sectors. Propelled by the growth of personal gaming, the firm pulled ahead of rivals like AMD and Intel to secure the largest share of the burgeoning GPU market.
The company’s next breakthrough came in 2006 when Nvidia released CUDA, a programming framework that enables developers to run applications on GPUs.
CUDA laid the groundwork for later innovations in machine learning that utilize GPUs’ parallel processing capabilities for deep neural network training.
2013-2022: Early AI Wave
From 2012 onward, GPU-based approaches emerged as the preferred way to train machine learning models, and Nvidia’s chips became the go-to hardware for AI research and development.
Throughout the 2010s, demand from the AI sector became an increasingly important growth driver for Nvidia.
Recognizing the significance of the new market, the company released its first dedicated AI chip, the H100, in 2022. Since then, sales have exploded, and demand for H100s has rapidly exceeded supply.
2023-Present: The AI Boom
Amid massive revenue growth due to H100 sales, Nvidia’s stock price has exploded in the last two years, growing nearly tenfold since September 2022 .
While the chipmaker hasn’t abandoned its original mission and is still a major producer of consumer graphics cards, data center processors have become Nvidia’s largest source of revenue.
Nvidia Challenges
With Nvidia now more valuable than Amazon and Google , it faces challenges unique to the world of Big Tech giants.
The Department of Justice reportedly launched an antitrust probe into the company earlier this year to investigate whether it unfairly limits customers’ ability to choose alternative suppliers.
A media report suggesting the DoJ had escalated its investigation prompted a sharp correction in Nvidia’s stock price. Although the firm has since denied receiving a subpoena, Nvidia shares remain depressed compared to earlier peaks, with some pundits concerned that the stock is overpriced.
Rising competition in the AI chip space could also threaten Nvidia’s market dominance. On the one hand, there is a growing interest in non-GPU alternatives for AI training. Conversely, the data center market is shifting from training to inference, a change that could also move the emphasis away from Nvidia’s GPUs.
