(Bloomberg) — In the weeks since the ChatGPT artificial intelligence tool took the world by storm, Nvidia Corp. has emerged as Wall Street’s preferred pick for traders seeking to profit from its potential.
The chipmaker’s stock has rallied 22% in the first three weeks of the year, placing it among the best performers in the S&P 500 Index. Contributing to the gains has been the hype around the chat bot released by OpenAI late last year that has demonstrated an uncanny capacity to mimic human writing.
The rationale is simple: Nvidia dominates the market for graphics chips designed for complex computing tasks needed to power AI applications. The more people use ChatGPT, the more computing power its owner OpenAI requires to generate responses to the millions of queries received from lazy students with essay assignments or struggling songwriters.
Citigroup Inc. estimates that rapid growth in ChatGPT usage could result in sales for Nvidia of $3 billion to $11 billion over 12 months. Analyst Atif Malik, while acknowledging the difficulty in modeling growth for such a nascent service, based his values on projections for number of words generated by ChatGPT and revenue per word for Nvidia.
“We believe Nvidia has in ChatGPT