Nvidia’s meteoric rise in 2024 has left a noticeable impact on the S&P 500 index, highlighting the chipmaker’s outsized influence in the semiconductor ecosystem. The company’s stock rally, driven by the surge in demand for AI chips, has accounted for a staggering 25% of the S&P 500’s 17% gain this year.
Nvidia’s share price has skyrocketed by 166% in the past 12 months, benefiting from the aggressive investments in AI by tech giants like Microsoft, Amazon, and Google. This trend has propelled CEO Jensen Huang to the forefront of the world’s wealthiest individuals, adding a remarkable $46.4 billion to his net worth in 2024 alone. Huang’s wealth now stands at $90.5 billion, placing him 18th on Bloomberg’s billionaire list.
This impressive surge in Huang’s fortune surpasses the combined wealth gains of tech titans Elon Musk, Jeff Bezos, and Bill Gates, highlighting the remarkable impact of Nvidia’s dominance in the AI sector.
Huang’s confidence in Nvidia’s future is palpable, with the company expecting to generate $5 in rental revenue for every $1 spent on its infrastructure. He has also reassured investors that Blackwell-based products will be shipped in the fourth fiscal quarter, further solidifying the company’s position in the burgeoning AI market.
While Nvidia’s stock performance has bolstered the S&P 500 and Huang’s personal wealth, the company’s reliance on Taiwan Semiconductor Manufacturing Co (TSMC) for its chip production has raised concerns. However, Huang has addressed these concerns by emphasizing the possibility of switching suppliers if necessary.
With Microsoft, Apple, and Nvidia collectively holding a 20% weighting in the S&P 500, investors can gain exposure to these tech giants through ETFs such as SPDR S&P 500 (SPY) and iShares Core S&P 500 ETF (IVV).
Nvidia’s stock closed 1.95% lower at $116.78 on Monday, but the company’s long-term prospects remain bright, fueled by the continued growth of the AI market and the increasing demand for its powerful chips.
