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There’s a popular meme that perfectly explains Nvidia’s meteoric rise from just another chipmaker to most valuable company in the world – all in less than two years. The meme shows three gold diggers – Microsoft, Alphabet and Meta – and a fourth person selling shovels – Nvidia. “When everyone digs for gold, sell shovels,” the tagline reads, meaning that Nvidia’s chips are the shovels in the AI gold rush we’re currently witnessing. “A trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process,” Nvidia CEO Jensen Huang said in May 2023. His company makes the chips that power said transition, aka the shovels.
Ever since Huang first revealed how much he expects his company to profit from the rise of AI in May 2023, Nvidia’s share price has seemingly known only one way: up. As of today, January 28, 2025, Nvidia’s share price is up 288 percent since May 24, 2023, and that’s after the January 27 rout that shaved almost $600 billion off the company’s market capitalization. Prior to that, the chipmaker’s share price had increased 367 percent or nearly five-fold in less than two years.
As our chart shows, the ride hasn’t always been smooth, though, as Nvidia’s share price has seen some wild swings on the way up, particularly in the past 12 months. As Nvidia’s valuation reached ever more lofty heights, shareholders began questioning whether a $3+ trillion valuation was really justified and, more importantly, how much upside there was left. Any sign of a slowdown in AI investment has since caused a sell-off, but so far Nvidia has always recovered relatively quickly. The news of DeepSeek-R1 needing significantly fewer of Nvidia’s GPUs to achieve similar results as OpenAI’s latest models sparked the latest and steepest such sell-off on Monday. I guess you don’t want to be a shovel salesman when someone comes up with a more efficient way of digging for gold.
This chart shows the development of Nvidia’s stock price since January 2, 2023.