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No company represents the boom in the artificial intelligence business like Nvidia. At times the company was even the most valuable in the world. Will it stay that way?
It's a dream for investors: a share doubles its value within a very short period of time. This is not an everyday scenario on the stock market – and so Christian Röhl, chief economist at neobroker Scalable Capital, speaks of a “poster stock” in the case of chip developer Nvidia.
The US company is the big beneficiary of the boom in artificial intelligence (AI). At times, Nvidia was even the most valuable company in the world.
After the price rise: Great expectations for Nvidia
“All those who now want to train AI models, who want to build business models, who want to build services around artificial intelligence, of course need computing power – and not just any processors, but the best processors,” says Christian Röhl.
Part of the steep rise of a share is that analysts' expectations also become greater. This has already been shown in the case of Nvidia. The group has continued to grow rapidly in recent months and demand is immense. But the share hasn't made any big jumps recently.
Nvidia is measured by its own success
The potential for disappointment is great, especially because of the groundbreaking success. According to Röhl, it could be enough for the company to just miss the analysts' expectations.
Then a stock like Nvidia could fall ten, fifteen or twenty percent in one day. “That is the risk that you simply have with these valuations and in such a market environment,” says economist Röhl.
Software companies invest billions in AI
The success of the semiconductor industry depends on how much capital continues to flow into technical infrastructure, new processors and large data centers. The main buyers are the large tech companies such as Microsoft, Alphabet, Meta or Amazon, which offer their customers so-called cloud applications, i.e. computing power in the form of servers or data storage.
In addition to chip manufacturers and developers, software companies in particular are at the forefront of the AI race. Chris-Oliver Schickentanz, board member at asset manager Capitall, assumes that artificial intelligence will conquer other industries over the course of 2025.
“First of all, these will be the IT consulting groups that will support companies from the old economy, from completely different industries, in integrating AI into their business model,” says Schickentanz.
expectations economy of AI increase
Many companies are already using AI applications – for example in the areas of administration, marketing or logistics. However, according to Chris-Oliver Schickentanz, the effect is still particularly noticeable on the cost side.
“For 2025 and 2026, the first companies are also expecting impulses on the sales side, i.e. additional growth through AI offerings.” Here too, expectations are rising.
Investor patience is crucial
But it remains questionable when a broader range of companies will be able to make money with artificial intelligence. Economist Christian Röhl from Scalable Capital emphasizes that people tend to underestimate the long-term potential of technical changes, but the pace is often overestimated.
“The key thing in the financial markets is patience. How long will investors put up with billions being invested in data centers without it being possible to really estimate what the business models will look like and when the returns will come?”
The bottom line is that only a few global corporations are currently benefiting financially from the hype surrounding artificial intelligence. Many others are still in the process of reducing costs or increasing productivity – before they can make money themselves with products based on AI.