Like gold it is still essential to advanced technology
Can a super-technological society still be linked to a precious and ancient raw material like gold? It seems so, considering what is happening to the chip giant Nvidia .
Nvidia, founded in 1993, is a technology company that produces GPUs, i.e. graphics processing cards, and other products. It initially specialized in making products for the video game industry, which assisted 3D rendering. If he was a committed player, he probably owned their products. If it wasn't, maybe he'd never heard of it.
With the sudden advancements in AI, the company has been everywhere in the news because its products can also be used for AI. Its fourth quarter revenue from Q4 2022 to 2023 literally increased by 265%.
Nvidia revenue
A decade ago, its market capitalization was around $10 billion. In 2016, it was around $50 billion. As of April 2024, its value exceeded $2 trillion. The Motley Fool ranked it as the third most valuable publicly traded company in the world, just behind Apple. It is now worth five times that of Walmart. It is one of the best performing stocks in recent years.
Sometimes the stock market, especially technology stocks, are placed in another mental category than traditional investments and stores of value, such as gold and silver.
But precious metals are often more closely tied to the tech sector than you might think.
This is because one of the essential components of many of its products is gold . Nvidia uses different metals to make its products: obviouslygold, but also tantalum, tungsten and tin. Demand for industrial silver is expected to increase, but many high-tech industries also depend on the industrial use of gold.
GPU microchips are made from gold and other metals such as red lead, silicon, and copper, due to their useful conductive properties. Of course, the monetary value of gold provides an incentive to minimize its use, but gold's chemical properties remain so useful that manufacturers continue to use gold in chips and sometimes in internal computer wiring and switches, despite their cost.
As competition for the best GPUs heats up and the price of GPUs is set to rise thanks to advances in artificial intelligence , the cost of metal in GPUs will become less relevant to gold as well.
This means manufacturers can use more gold in their products without dramatically increasing the cost of GPUs and other products.
Perhaps this is why some savvy investors are betting on both gold and AI companies, after all, the two sectors are also indirectly linked.
A prominent example is Stanley Druckenmiller, who shifted his allocation from big tech to AI and gold.
On the one hand this increases the basic resistance of the price of gold, because it increases its industrial use, but on the other hand it creates a dangerous link between gold and AI: a decline in interest in artificial intelligence could hit the market Of their.
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The article How gold is still essential for advanced technology comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/come-loro-e-ancora-essenziale-per-la-tecnologia-avanzata/ on Fri, 26 Apr 2024 07:00:03 +0000.