Nvidia Benefits from AI Boom, Jensen Huang’s Net Worth Soars

Nvidia Corp., the semiconductor maker, has been touted by Wall Street analysts as a major beneficiary of increased investment in artificial intelligence (AI). The company dominates the market for graphics chips, which provide the computing power behind the software models used in AI applications. The surge of interest in AI has caused Nvidia’s shares to rally 34%, its best month in almost six years.[0] Microsoft’s pledge to invest $10 billion in OpenAI, ChatGPT’s parent company, has further fueled the AI hype.[1]

Analysts from Bank of America and Wells Fargo have both highlighted Nvidia as one of the biggest beneficiaries of the AI hype, citing the increased demand for Nvidia’s upcoming chip models to meet the additional computing requirements of the new AI models.

The surge in AI stocks has also had a positive effect on Nvidia CEO Jensen Huang’s net worth.[2] According to Bloomberg’s Billionaire Index, Huang has seen the largest percentage gain to his net worth among US billionaires this year, with a $5.1 billion increase.[3]

As a result of the AI craze, several smaller-cap AI stocks have seen massive gains.[4] BigBear.ai (BBAI) and SoundHound AI (SOUN) have both skyrocketed by more than 40%, while C3.ai (AI) has gained more than 6%.[5] While these stocks have enjoyed impressive gains, the current AI craze is reminiscent of the “blockchain mania” from a few years ago, where any company with “blockchain” in its name rocketed higher.[6] Ultimately, current earnings power and future earnings runway began to matter again in the blockchain stocks, and a similar outcome is likely for AI-related stocks.[6]

0. “ChatGPT Unleashes Stock Trader Stampede for Everything AI” Yahoo! Voices, 1 Feb. 2023, https://www.yahoo.com/now/chatgpt-unleashes-stock-trader-stampede-110951770.html

1. “Jensen Huang’s Fortune Soars with the Rise of ChatGPT” ABOUT INSIDER, 1 Feb. 2023, https://www.aboutinsider.com/jensen-huangs-fortune-soars-with-the-rise-of-chatgpt

2. “Nvidia CEO Jensen Huang’s wealth soars as ChatGPT and OpenAI explode in popularity” OC3D, 31 Jan. 2023, https://overclock3d.net/news/software/nvidia_ceo_jensen_huang_s_wealth_soars_as_chatgpt_and_openai_explode_in_popularity/1

3. “ChatGPT Has Turned NVIDIA’s AI GPUs Into Literal Gold, Company Stock Soars Over 40% This Month” Wccftech, 3 Feb. 2023, https://wccftech.com/chatgpt-has-turned-nvidias-ai-gpus-into-literal-gold-company-stock-soars-over-40-this-month/

4. “Why Are AI Stocks AI, BBAI, SOUN Up Today?” InvestorPlace, 3 Feb. 2023, https://investorplace.com/2023/02/why-are-ai-stocks-ai-bbai-soun-up-today/

5. “Hot Stocks: AI stocks surge; LSI takeover bid; NSSC sets 52-week high; PLCE declines” Seeking Alpha, 6 Feb. 2023, https://seekingalpha.com/news/3932653-hot-stocks-ai-stocks-surge-lsi-jumps-on-takeover-bid-nssc-sets-52-week-high-plce-declines

6. “AI Mania: 3 Rare Pure Plays to Monitor” Zacks Investment Research, 6 Feb. 2023, https://www.zacks.com/commentary/2050278/ai-mania-3-rare-pure-plays-to-monitor