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The AI Push Continues

February 27, 2024

A running theme in 2023 was the explosion of AI and in turn the rebound of big tech companies from their 2022 rut. Companies, including Apple, Google, Amazon, Meta and many more all outlined their own plans around AI and what the future would mean for them if they were to utilize the technology as much as they possibly could. 

All the while, there was one company that was also dominating headlines with their growth and outlook on the future. That company was Nvidia. They quickly carved out their spot as the premiere semiconductor chip company that will make this AI future possible. Yes, there are competitors to them. But for now, Nvidia dominates the headlines and the market as their technology is steps ahead of their competitors. 

This story has continued into 2024 and even flourished. As of writing this, Nvidia just recently released their last earnings. Nvidia posted massive numbers, easily surpassing all expectations and even noting continued growth in their sales of semiconductor chips. Nvidia themselves added roughly $277 billion of market cap in one single day, and closed around a value of $1.97 trillion, making them the third most valuable company behind Microsoft and Apple. On the back of all of this, the market rallied massively for the day and hit all new highs in the S&P 500. 

So why the massive growth and positive reaction from one company’s earnings? One big reason, optimism. The excitement from this continued growth is impossible to ignore. The reason being, Nvidia can be seen as a window into the overall investment that companies are making. When Nvidia’s sales are as high as they are, it shows the ability and want for other companies to continue to make efforts to grow. That does not happen if the economy is not strong. That does not happen if the companies are feeling positive going into the future. 

So what does this all mean for the market and economy? It means that there is optimism on the data we are seeing. The market and economy are not one in the same, but if the economy is showing strength through company investment and growth of companies like Nvidia, then the market will react positively to that. 

AI will continue to change how we see things around us. Both in the economy and everyday personal lives. And in the meantime, as those changes are coming, the growth of Nvidia can be viewed as a positive sign for all of us as we move into that future.