NVIDIA's stock experienced a dramatic surge in the second half of 2024. This surge was primarily driven by exponential growth in its data center business, fueled by skyrocketing demand for AI workloads and GPU acceleration in cloud infrastructure.
As generative AI exploded across industries, hyperscalers like Microsoft, Google, and Amazon Web Services made massive capital investments into NVIDIA’s H100 and A100 GPU units. As a result, NVIDIA’s revenue from its Data Center segment doubled YoY, pushing its market capitalization beyond $2.5 trillion by year-end 2024.
GPUs (Graphics Processing Units) are designed for parallel computation. While CPUs handle sequential tasks, GPUs manage thousands of concurrent threads, making them ideal for training AI models, video rendering, and simulations.
NVIDIA pioneered CUDA (Compute Unified Device Architecture), enabling developers to write general-purpose code for GPUs. This innovation was a turning point, allowing deep learning frameworks like TensorFlow and PyTorch to leverage GPU acceleration.
AMD, a key competitor, provides high-performance GPUs like the MI300X and ROCm software stack. However, NVIDIA’s ecosystem dominance, combined with CUDA and hardware-software integration, gave it a decisive edge in AI and data centers.
🧠 The data center growth propelled these financials. With record margins and robust cash generation, NVIDIA’s fundamentals remain dominant heading into 2025.
The Data Center segment became NVIDIA's largest revenue driver in 2024, fueled by demand for AI and HPC workloads. Flagship products like the H100 Tensor Core GPU and Grace Hopper Superchip enabled unprecedented performance gains for hyperscalers and enterprises.
NVIDIA’s ecosystem — including CUDA, cuDNN, and AI SDKs — locks in developers, making switching costly. Partnerships with Amazon Web Services, Microsoft Azure, and Meta fortified recurring revenue and expanded industry adoption.
This growth transformed NVIDIA into a backbone for AI infrastructure worldwide, underpinning advancements in healthcare, automotive, and cloud computing.
AMD, Intel, and other GPU and AI chipmakers remain key competitors in both consumer and data center segments.
AMD’s MI300X accelerators and ROCm software stack target HPC and AI workloads but have yet to match NVIDIA’s developer ecosystem or market penetration.
Intel focuses on its Habana AI chips and integrated graphics solutions, while startups like Graphcore and Cerebras push niche AI architectures.
NVIDIA’s early investment in software, silicon design, and large-scale fabrication partnerships gives it a durable moat.
Interesting overlaps exist between NVIDIA and competitors via board members and executives, affecting strategy and partnerships.
For example, some former AMD executives have transitioned into advisory roles at NVIDIA, creating informal channels for industry insights.
Several large institutional investors hold significant shares across NVIDIA, AMD, and Intel, potentially influencing governance and competitive dynamics.
NVIDIA collaborates extensively with hyperscalers, OEMs, and research institutions. Collaborations like the Blackwell AI platform drive innovation across AI, gaming, autonomous vehicles, and healthcare.
Partnerships with cloud providers enable AI-as-a-Service growth, democratizing AI access worldwide.
This ecosystem growth fuels innovation, job creation, and GDP growth in tech-driven sectors, reinforcing NVIDIA’s critical role in the global economy.
Historically, NVIDIA has shown strong cyclicality tied to gaming and semiconductor trends. However, the AI-driven 2024 data center boom represents a structural shift rather than a cyclical one.
In 2025 YTD, NVIDIA’s stock has increased ~110%, more than 2x the S&P 500 and nearly 1.5x AMD's gain. While valuations remain rich, NVIDIA’s dominance in GPU compute and AI infrastructure justifies investor optimism.