It seems Nvidia(NASDAQ: NVDA) he is haunted by his success. After another impressive quarter that increased its annualized earnings (EPS), the chipmaker’s stock fell in the days following the release of its Q3 numbers. The truth is, expectations cannot be high. It’s a good thing the company seems to be firing on all cylinders.
This is not the first time this has happened, and it may not be the last. Nvidia saw its stock return about 20% in the weeks after its last earnings release, but has gained about 35% since then. There are good reasons to remain optimistic, as next year holds some big incentives for the company.
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Tuesday, Dec. 3, Nvidia joined other leaders Artificial Intelligence (AI) companies to discuss the future of the industry and the financial community. Every year UBS The Global Technology and AI Conference is giving Nvidia an opportunity to show continued leadership and make a case for why they are about to go. The event combines innovation and practicality, highlighting how AI can impact real value creation.
Even if one event doesn’t move the needle, every opportunity a company – and companies, for that matter – has a chance to make its case count. Here are three reasons why Nvidia is a buy while the event continues.
Look, this is not news, but it bears repeating: the AI market is huge, growing rapidly, and there are good reasons to believe that this will continue. PwC – one of the “big four” accounting firms – believes that AI could add $15.7 trillion to the global economy by 2030. Statista predicts a compound annual growth rate (CAGR) for the entire AI market of 28.3% until 2030.
It’s not just pundits and talking heads who think so; CEOs from Silicon Valley reiterated their commitment to AI and, in particular, spending billions of dollars on AI tools. In Trim‘s last call for moneyCEO Mark Zuckerberg said that despite the money spent on writing, his company “must invest more” because AI will “accelerate (Meta’s) big business” and “should have a strong ROI over the next few years.”
This is good news for Nvidia. The company’s chips supply many companies, and this market dominance is expected to continue in the future. At this point, though AMD can offer a chip that is compatible with the performance of Nvidia’s flagship chips. While this lead may diminish over time, it’s doubtful Nvidia will make the leap. Nvidia has a lot of resources – in capital and talent – it can use to protect its position.
Blackwell, Nvidia’s newest line of Superchips, was released this month, and samples are already in the hands of many of its customers. The chips are very powerful, more than twice as powerful as Hopper’s smaller chips, and demand is at a premium. CEO Jensen Huang described the demand as “phenomenal” and reports suggest the company has been sold out for the entire year.
This is a big moment for Nvidia, and Wall Street is eager to see the company launch successfully. If there are any problems to be expected, Nvidia’s main team didn’t share it during its Q3 earnings call. The group painted an exciting picture for next year with Blackwell’s release, expecting more Blackwells to ship than expected. I think there’s a chance that the money from Blackwell will be bigger than Wall Street expects, but we’ll learn more in the coming months.
The statement was made recently, but the main focus of Nvidia’s call, aside from the launch of Blackwell, was the development and implementation of useful AI – especially AI that can. to donot just creation. Jensen Huang likes to think of them as “AI partners” that can “help employees do their jobs faster and better.”
I think agent AI if done well, that’s where the real value of AI is. This is where realism can be created in organizations of all sizes. One of the questions being asked throughout the market is whether AI can deliver value that makes it more profitable. If it can be done, this is where we will see it.
Nvidia is at the forefront of this, offering a “functional AI platform,” as Huang puts it, insisting that industry leaders are already using it to create “pilots” — the company’s term for AI assistants and assistants.
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Randi Zuckerberg, former head of market development and Facebook spokesperson and sister of Meta Platforms CEO Mark Zuckerberg, is a board member of The Motley Fool. Johnny Rice has no responsibility in any of the matters mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, and Nvidia. The Motley Fool has disclosure process.
