Why did NVIDIA top the US stock market? This is not just a victory for AI.

In 2024, NVIDIA's stock price has skyrocketed, with its market capitalization surpassing $3 trillion, overtaking Apple and Microsoft to become the top U.S. stock. Many are amazed: How did this "graphics card company" become the world's most valuable enterprise? $NVIDIA(NVDA.US)

In reality, NVIDIA's rise is the result of both technological dividends and a combination of business strategy, industry cycles, and capital deployment. This is not just a "victory of the AI wave" but also a "symbol of the computing era."

Let’s analyze from several key dimensions: What exactly is NVIDIA's secret?

1. The "Faucet" of AI: Unshakable Dominance in GPUs

NVIDIA's core asset is the GPU (Graphics Processing Unit), but it is no longer just a company making gaming graphics cards. Over the past decade, NVIDIA has successfully transformed GPUs from graphics rendering tools into the computational core for AI training and inference.

• Training large models like ChatGPT requires tens of thousands of GPUs for parallel computing, with over 90% using NVIDIA's A100/H100 chips.
• Major players like OpenAI, Microsoft, Meta, Google, and Amazon all rely on NVIDIA for AI infrastructure.

In the AI era, whoever controls computing power holds the initiative. NVIDIA is like a reservoir, with all AI applications needing to "buy water" from it. This is a monopoly at the infrastructure level.

2. Beyond Monopoly: The CUDA Ecosystem Barrier

NVIDIA isn’t the only company making GPUs—AMD, Intel, and Huawei also have products. So why do customers still prefer NVIDIA?

The answer is the ecosystem.

Since 2006, NVIDIA has been building the CUDA platform, a deeply optimized software development toolchain that allows developers to efficiently harness GPU computing power. Today, millions of AI models, research papers, and machine learning codes are developed based on CUDA.

Once you use CUDA, switching GPUs means rewriting code, with extremely high migration costs. This is NVIDIA's moat—technological leadership + ecosystem lock-in.

3. Business Model Evolution: Selling Chips, and More

NVIDIA used to just sell chips, but now it has gradually transformed into an "AI infrastructure provider."

• DGX Supercomputers: Bundling GPUs, CPUs, and software for sale, priced at hundreds of thousands or even millions of dollars.
• NVIDIA AI Enterprise: Selling AI training platforms and algorithm tools to enterprise clients, with extremely high margins.
• Cloud Services: Partnering with Amazon AWS, Microsoft Azure, and Google Cloud to offer GPU rentals and on-demand computing.

This means NVIDIA doesn’t just make money once (selling chips) but also earns from services, platforms, and even subscriptions. Its revenue model is more stable and sustainable, significantly boosting its valuation logic.

4. Financial Performance: A Growth Machine Beyond Imagination

Numbers tell the best story:

Guidance for fiscal 2025 continues to be revised upward, with gross margins nearing 78% and ROE exceeding 100%, making it virtually a "money-printing machine."

Even traditional tech giants like Apple, Microsoft, and Amazon struggle to maintain such explosive growth.

5. AI Is Still Accelerating: The Boom Is Far from Over

Many worry NVIDIA has "peaked," but from a technological cycle perspective, AI infrastructure is just getting started:

• AI PCs and AI Phones: Future devices will need local AI inference capabilities, driving demand for GPUs or NPUs.
• Multimodal Models like Sora and Gemini: Require even more computing power than text-based models.
• National AI Infrastructure: Countries like the U.S., China, and Europe are investing billions in "AI computing centers."

NVIDIA stands at the forefront of this technological wave, reaping benefits across the entire industry chain.

6. Final Thoughts: Is NVIDIA Still Worth Investing In?

This is a question many investors are asking.

Short-term, the stock has surged, and valuations are no longer cheap. But long-term, if AI is the future, NVIDIA is one of the most certain bets.

As Warren Buffett said, "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

NVIDIA is such a wonderful company—it sells chips, but more importantly, it's the "money-printing machine" of the AI era.