NVDA: Nvidia's murky AI future isn't reflected in its share price

Every now and then, a company comes along that is so dominant and is growing so quickly that it feels like the only stock anyone cares about. I’m referring, of course, to Nvidia, the chip giant powering artificial intelligence. Its stock has surged 4000 per cent over the past five years, making it one of the three most valuable businesses in the world alongside heavyweights Microsoft and Apple.

Nvidia deserves every bit of the attention. Its market share for AI chips is around 90 per cent. Its profit margin is 57 per cent on $US80 billion ($120 billion) in revenue, by far the highest revenue among companies with comparable profitability in the S&P 500 Index. It has also grown sales by 64 per cent a year over the past five years, the highest growth rate among S&P 500 companies.

Bloomberg Opinion