Nvidia results show its growing lead in AI chip race

Chipmaker Nvidia's stock soared 14 percent in early trading Thursday after it posted stronger than predicted results after the closing bell Wednesday. The company also forecast sales above Wall Street expectations. This is in sharp contrast to rival Intel, which cut its dividend 66 percent this week after lowering its first quarter revenue outlook last month. Nvidia, which got its start producing chips to make video games look more realistic, now dominates the market for specialized chips that provide the kind of computing power needed for artificial intelligence like chat GPT. Intel has only a very small presence in this area. Research firm Gartner says the share of chips like this that are used in data centers is expected to rise to more than 15 percent by 2026 from less than 3 percent in 2020. One technology fund portfolio manager whose fund owns shares of Nvidia tells Reuters that it's hard to pinpoint how big AI is today as a percentage of the company's sales, but thinks it has the potential to grow exponentially as large tech firms rush to develop applications.

Shares of Nvidia have jumped more than 60 percent since the start of the year, nearly three times the gain in the Philadelphia Semiconductor Index. Its market value is about five times that of Intel and is the seventh largest publicly traded U.S. firm.

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