In a meteoric rise fueled by the AI frenzy, Nvidia (NVDA) hit a historic milestone in June, with a market cap surpassing $1 trillion and shares peaking at $549.91 last Friday. Boasting an estimated 70% to 90% share of the global AI chip market, Nvidia’s prowess extends beyond hardware. The company’s strategic moat lies in its Cuda software, crucial for AI platform development, according to Gartner VP analyst Chirag Dekate.
However, challenges loom as competitors like Intel (INTC) and AMD (AMD) gear up to claim their slice of the AI pie. AMD’s recent debut of the MI300 accelerator, directly challenging Nvidia’s data center accelerators, and Intel’s development of the Gaudi3 AI accelerator signal an intensifying battle. Additionally, hyperscalers such as Microsoft, Google, Amazon, and Meta are diverting attention to application-specific integrated circuits (ASICs), posing a potential threat to Nvidia’s GPU dominance. While Nvidia’s technology remains ahead, the evolving landscape suggests the company must navigate carefully to maintain its stronghold in the dynamic AI chip market.