Nvidia Corp’s (NASDAQ:NVDA) rally disproportionately influences the S&P 500 index, reflecting concerns over the domino effect due to the integrated semiconductor ecosystem.
Nvidia accounted for 25% of the S&P 500’s 17% gain in 2024, Reuters reports.
The chip designer has risen by 166% in the last 12 months as Big Techs, including Microsoft Corp (NASDAQ:MSFT), Amazon.Com Inc (NASDAQ:AMZN), and Google parent Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL), splurge on their artificial intelligence ambitions.
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The rising valuation of NvidiaNVIDIA in 2024 has helped boost the wealth of Jensen Huang, the co-founder and CEO of the company that was once created inside a Denny’s restaurant.
Huang has a wealth of $90.5 billion, ranking 18th according to Bloomberg. While Huang hasn’t cracked the top 10 list yet and would currently need to hit a wealth of $130 billion, the Nvidia co-founder is one of the fastest risers among the world’s richest people. Huang’s wealth is up $46.4 billion year-to-date in 2024.
That figure is more than the combined $41.83 billion gained by Elon Musk, Jeff Bezos and Bill Gates. Musk, Bezos and Gates currently rank first, second and fifth, respectively, with their current wealth and year-to-date gains.
- Elon Musk: $237 billion, +$7.73 billion year-to-date
- Jeff Bezos: $195 billion, +$17.9 billion year-to-date
- Bill Gates: $157 billion, +$16.2 billion year-to-date
The gain by Huang is one of the largest year-to-date gains, trailing only Meta Platforms CEO Mark Zuckerberg, who is up $49.9 billion and listed fourth at $178 billion.
It’s not just personal wealth – due to the AI frenzy, Huang expects hyper-scale customers to produce $5 in rental revenue for every $1 spent on Nvidia’s infrastructure. He also reiterated that Blackwell-based products will ship in the fourth fiscal quarter.
This indicates that Nvidia stock losing value would impact the S&P500 and Huang’s wealth. However, Huang had snubbed geopolitical tensions surrounding supplier Taiwan Semiconductor Manufacturing Co (NYSE:TSM), voicing the possibility of switching suppliers.
Microsoft, Apple Inc (NASDAQ:AAPL), and Nvidia have a combined weighting of 20% in the S&P 500. Microsoft gained 31%, and Apple has risen 22% in the last 12 months as they remain invested in their AI goals.
Investors can gain exposure to Nvidia and the S&P 500 through SPDR S&P 500 (NYSE:SPY) and iShares Core S&P 500 ETF (NYSE:IVV).
Price Action: NVDA stock closed lower by 1.95% to $116.78 on Monday.
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