OpenAI’s ChatGPT AI platform was launched in the final week of November 2022, ushering in a new era for many businesses and the stock market itself. The impact of the AI boom can be vividly seen in the market capitalization of the top 10 companies heavily involved in technology. Research by Finbold shows that these companies saw a combined growth of $5.4 trillion from December 3, 2022, to June 5, 2024.
Among the major beneficiaries of the AI gold rush was Nvidia, a leading chipmaker, whose market cap skyrocketed from $420 billion to $2.8 trillion. However, Nvidia was not alone in experiencing massive growth due to the AI boom. Microsoft also saw significant market cap growth after partnering with OpenAI in 2019.
Interestingly, the growth in the AI sector appears to be concentrated among a few key players. Nvidia alone contributed 45% of the total growth of the top 10 companies, with Microsoft, Alphabet, and Meta Platforms dominating the rest. As of June 5, 2024, the combined market cap of the top 3 firms accounted for nearly 80% of the total market cap of the top 10 AI companies.
While AI has become a buzzword in the business world, it is not a guaranteed solution for struggling companies. Despite the success of companies like Nvidia and Meta, some stocks have declined despite their involvement in cutting-edge technology. Tesla, for example, has seen its market cap drop significantly, despite its efforts in AI-driven autonomous vehicles.
In conclusion, while AI has had a profound impact on the stock market and business operations, it is not a one-size-fits-all solution for every company. Companies must carefully navigate the AI landscape to ensure sustainable growth and success.
