NVIDIA CEO Jensen Huang speaks at the COMPUTEX Forum event in Taipei, Taiwan on June 4, 2024.
Ann Wang | Reuters
But despite its $3.1 trillion valuation (it had hit $3.3 trillion before a two-day drop), Nvidia doesn’t even feature in Interbrand’s latest list of the top 100 most well-known companies, a list that includes names like McDonald’s, Starbucks, Disney and Netflix.
Nvidia’s historic valuation surge (its shares have risen nearly ninefold since the end of 2022) has been driven almost entirely by demand for the company’s graphics processing units (GPUs), which are at the center of the generative artificial intelligence boom, and the hype around AI more broadly. Nvidia holds more than 80% of the market for chips used to train and deploy AI software like ChatGPT. The main buyers of the company’s chips are a handful of giant tech companies.
The speed of Nvidia’s growth, combined with its relative lack of consumer contact along the way, has given the 31-year-old company far less brand recognition on Main Street than it does on Wall Street. Ranked 100th on Interbrand’s 2023 list is Japanese camera maker Canon, while Dutch brewer Heineken is at 99th.
“As a product company that recently entered the global stage, Nvidia has not had the time or resources to transform its role and strengthen its brand to protect future revenue,” Greg Silverman, director of global brand economics at Interbrand, said in an email. The risk for Nvidia is that “despite its high market cap, its value will be limited by a weak brand.”
An Nvidia spokesman declined to comment.
NVIDIA’s annual revenue growth has exceeded 200% for each of the past three consecutive quarters, and LSEG said its revenue is expected to nearly double year-over-year to more than $120 billion in fiscal 2025.
The company’s data center GPUs, which accounted for 85% of its revenue in the most recent quarter, are installed in large facilities and typically require teams of expensive data science and supercomputing experts to configure them efficiently to create AI software.
In contrast, Apple, ranked No. 1 by Interbrand, makes most of its revenue from selling iPhones and other devices to consumers around the world. No. 2, Microsoft, is a big player in business sales but is widely known for its Windows and Office software. No. 3, Amazon, aims to be a one-stop shop for consumers, and No. 4, Google, is the gateway to the internet for many people.
Other brands in the top 10 include South Korean electronics giant Samsung, three car makers (Toyota, Mercedes-Benz and BMW), Coca-Cola and Nike.
Further down, at No. 24, is NVIDIA rival Intel, best known for making the processors that power laptops and PCs and for its long-running “Intel Inside” advertising campaign. Even server maker Hewlett Packard Enterprise makes it to No. 91.
But competing studies suggest Nvidia’s brand value is catching up with its peers.
Nvidia rose 18 places to No. 6 on Kantar BrandZ’s ranking of the 100 most valuable brands in the world this month. The brand’s total value has risen 178% in one year to an estimated $202 billion. Kantar derives its overall estimate of brand value by surveying corporate buyers, who primarily use the platform to evaluate brands for sale to other companies.
“Nvidia is as relevant and meaningful to B2B buyers making large in-house purchases as Apple is to consumers buying iPads and Macs,” Mark Glovsky, senior brand strategist at Kantar, told CNBC.
Nvidia may not be a household name to your parents or kids, but it resonates in certain corners of the consumer world — just ask your avid gaming buddies.
When Nvidia was founded in 1991, AI was still a nascent field, and the company’s main focus was on designing chips that could quickly draw digital triangles, a fundamental capability that would lead to a massive expansion of 3D gaming.
For years, NVIDIA and its GeForce brand and green logo have been familiar to the types of people who mod their computers to run cutting-edge games. NVIDIA also provides chips for the Nintendo Switch console, which has shipped more than 140 million units worldwide.
Nintendo Switch console.
Philip Fong | AFP | Getty Images
Unlike Intel, Nvidia has never made a name for itself with flashy ad campaigns, and gaming is now just an attractive side business for the chipmaker. It reported $2.6 billion in revenue in the most recent quarter, 10% of total sales and up 18% from a year ago.
When it comes to Nvidia’s flagship product, companies and institutions looking to buy the company’s AI chips must go through an extensive quoting and sales process, often through computer equipment makers such as Dell or HPE. These vendors sell complete systems that include memory, central processing units and other components. Even experts who want to train AI models are more likely to rent access to Nvidia through a cloud provider than build their own server clusters.
Still, Nvidia’s profile is growing fast: It has emerged as the most widely held stock among retail investors, according to data collected and published last month by Vanda Research.
While the company didn’t make Interbrand’s 2023 Top 100 list, Silverman said the company’s data showed a fourfold increase in brand awareness over the past 12 months, which will help inform the next ranking.
Perhaps by then people will know how to pronounce the name that’s been the subject of debate on obscure gaming forums: the company pronounces it “en-VID-ia.”
clock: “The Magnificent Seven” should have another strong earnings season this year
