November 1, 2024
Will Nvidia’s AI Bet Continue to Pay Off in 2025? #NewsUnitedStates

Will Nvidia’s AI Bet Continue to Pay Off in 2025? #NewsUnitedStates

CashNews.co

Nvidia (NASDAQ:NVDA) bears have been proven wrong continuously in the past two years, and the stock is up 923% since. This company went on to become the largest in the world before declining, but it is on another rally that could make it the biggest company yet again. Very few people would’ve thought that such a thing would be possible even just a year ago.

That said, the stock market is–and always will be–a weighing machine in the long run. The bulls may have been right so far, but that does not mean that Nvidia will keep its shine forever. No stock in history has defied gravity for years and years without a major correction of some sort. Conversely, the bearish argument here is taking a very long time to play out. There’s competition on the horizon, but the numbers coming out of Nvidia’s quarterly reports are simply too high for the market to not reward.

Anyone telling you with absolute certainty about where this train is heading is lying. However, what we can do is dig deeper and see what can go right and what can go wrong. You can then form your own opinion–with a lot more confidence. Let’s start!

We’re going to assume that you already have a decent idea of what Nvidia does. On that note, we’re going to jump into the most important part of Nvidia’s business: Compute & Networking.

Compute & Networking is Nvidia’s largest and fastest-growing segment. It generated $22.68 billion in revenues in Q1 fiscal 2025, up by an extraordinary 5.1X year-on-year. The segment further accelerated in Q2 fiscal 2025 and reached $26.3 billion in revenue. This marked a 16% sequential increase and a staggering 154% year-over-year growth.

The success here stems from Nvidia’s flagship H100 data center GPUs. These GPUs are poised to get even better with the upcoming H200 and Blackwell B200 architectures. Speaking of Blackwell, it claims to deliver up to 30 times greater inference performance and consume 25 times less energy for massive AI models compared to its predecessors.

Now let’s see what the competition has to offer.

The underdogs AMD and Intel are making significant strides against Nvidia. However, they’re more focused on trying to undercut Nvidia’s chips instead of trying to outperform them. AMD’s Instinct MI300X chip focuses on inference workloads and Intel’s Gaudi 3 accelerator is positioning itself as a more cost-effective alternative.

AI hardware isn’t the only thing Nvidia is working on, though. Nvidia’s competitive moat extends beyond hardware. Its CUDA software platform has become the industry standard, creating what CEO Jensen Huang calls a “virtuous circle.” The company is expanding its ecosystem with new products like Spectrum-X Ethernet for AI and NVIDIA AI Enterprise software.

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