NVIDIA Corp NVDA has surged past a $3 trillion market cap, but it has some distance to cover as far as brand recognition is concerned. According to a consulting firm, Apple Inc., Microsoft Corp., Amazon.com Inc., and Alpbabet Inc.’s Google were the four leading global brands at the end of 2023. They are also among the world’s five most valuable companies.
What Happened: Nvidia’s market capitalization crossed the $3 trillion mark and even surpassed, surpassing Microsoft for a brief period last week. However, the company’s brand recognition doesn’t reflect its market capitalization, as it doesn’t even make it to the top 100 most iconic names on Interbrand’s latest list of iconic names, reported CNBC.
The list includes names like McDonald’s Corp., Starbucks Corp., The Walt Disney Co., and Netflix Inc., among others.
Nvidia’s rapid valuation growth, which has seen its stock climb nearly eight-fold since the end of 2022, is primarily driven by the demand for its GPUs, which are crucial to the AI boom. Despite this, the company’s brand recognition on Main Street lags far behind its allure on Wall Street.
"As a product company recently moving onto a global stage, Nvidia has not had time, nor has it dedicated resources, to change its role of brand and strengthen its brand to protect future revenue," said Greg Silverman, Interbrand's global director of brand economics, according to the report.
Silverman added that the risk for Nvidia is that its "weak brand strength will limit how valuable it will be, despite its market cap heights."
Despite its lack of recognition on Interbrand’s list, Nvidia’s brand value is catching up to that of its peers. In a recent ranking of the 100 most valuable global brands by Kantar BrandZ, Nvidia landed at No. 6, jumping 18 places from its previous survey.
"Nvidia is pound for pound as relevant and meaningful to that B2B buyer that's looking to make big, large purchases in-house for their company as Apple is to the consumer who's buying an iPad or a Mac," Marc Glovsky, senior brand strategist at Kantar, said, according to the report.
Why It Matters: Nvidia’s rise to the top of the market cap charts is a significant achievement for the company, which has undergone a dramatic transformation from a specialized graphics card manufacturer to a pivotal player in the generative AI surge.
However, more recently, Nvidia’s CEO, Jensen Huang, has been offloading shares oof the company. He sold Nvidia shares worth over $90 million in the last week. This comes amid concerns about the company’s future earnings, with veteran tech investor Paul Wick voicing his reservations about Nvidia’s growth prospects.
Meanwhile, Masayoshi Son, the founder of SoftBank Group, expressed regret over the decision to sell the company’s stake in Nvidia, which resulted in SoftBank missing out on a potential $157 billion windfall.
Nvidia’s shares closed at $126.57 on Friday, after a 3.22% decline, according to Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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