Nvidia stock is soaring. This is why we have been winning AI races so far.

AI For Business

Nvidia CEO Jensen Huang
Mandel Gunn/AFP via Getty Images

  • NVIDIA’s stock surged 165% in 2023 as investors woke up to the potential of artificial intelligence.
  • Nvidia seems perfectly positioned for AI growth as companies rely on Nvidia’s high-tech GPUs to power chatbots like ChatGPT and Bard.
  • Here’s why Nvidia is poised to continue dominating AI.

Nvidia last week woke investors to the fact that artificial intelligence is going to be a very big deal, and a very big business.

Nvidia’s shares surged as much as 30% on Thursday, adding nearly $200 billion to its market value after the company shared “amazing” earnings prospects for its AI-powered GPU chips.

The stock is up 165% so far in 2023, and some analysts believe there is still plenty of room for growth. Wall Street analysts rushed to raise their price targets for Nvidia on Thursday, with some hitting $500 a share. The stock traded at $388.52 on Friday afternoon.

The company has grown from a video game-focused foundation 30 years ago to selling “picks and shovels” during the AI ​​gold rush.

That’s why the Santa Clara, Calif.-based company is leading the AI ​​arms race.

“True Visionary”

“A dozen years ago, [CEO] Jensen Huang knew where the market was headed. [Nvidia] Baird technology strategist Ted Mortonson told Insider on Friday, “We’ve invested billions in software, not just silicon, and Jensen understands where the market is going before it becomes a reality. I mean, he’s a real visionary.”

Mortonson highlighted the success of Nvidia’s H-100 graphics processor unit, which was launched last year.

According to Mortonson, the H-100 enables “leaps in training, inference and basically generative AI,” and it’s this particular chip that allowed ChatGPT to make its full debut last November. .

Nvidia has the best chips to power its AI capabilities, but it also has the right software and silicon stacks to stay competitive around your business.

“They have the entire AI silicon stack, and they’re basically three components. They have cutting-edge GPUs, advanced networking embedded in the silicon, and advanced memory embedded in the We are working on a new CPU right now,” Mortonson explained.

In other words, Nvidia is a one-stop-shop for what companies need to advance their AI ambitions. Like Apple’s iPhone and his iOS system, they control the entire ecosystem, both hardware and software, Mortonson said.

“When you combine all of these things, you get an integrated, very powerful AI engine, and they are years ahead of everyone else,” Mortonson said, adding that the highlighted Nvidia’s CUDA software development, which is far ahead of the curve.

Morton adamantly attributed the company’s success to Huang’s foresight, comparing it to other tech icons like Tesla CEO Elon Musk.

“The GPU expertise through their vision has brought us to a level where AI can be widely implemented in basically every industry. “I think we’re going to go down in history as one of the coolest engineers,” said Mortonson, “together with Elon.”

“It’s clear that NVIDIA will be the biggest winner.”

CFRA equity analyst Angelo Gino told Insider that NVIDIA will continue to lead the AI ​​space, given its deep history of GPU expertise and current dominance of the GPU data center market. He said he does.

“From our point of view, it is clear that NVIDIA will be the biggest winner. NVIDIA is the inventor of the GPU, which was invented in 1999. They own over 95% market share of the GPU market in the data center sector. We do,” Zino said.

CPUs, mostly developed by Intel and some by AMD, can’t handle the massive processing power needed to run AI, but Nvidia’s GPUs can.

“Over the years, people have realized that these GPUs have the ability to solve some of the most difficult kinds of computing problems out there…and Huang says this will eventually happen. I had a vision to do it,” says Zino.

He added that the demand for GPUs creates a huge market for Nvidia to serve, not only for its core business of gaming and data centers, but also self-driving cars and many other technologies.

“How they work with these enterprise companies is invaluable and is a big reason we think they are likely to maintain their over 90% market share position in the near future,” Gino said. concluded.

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