2 reasons to buy Nvidia after the stock split
1. The artificial intelligence industry has just begun
It's only been 2 years since open AI took the world by storm with ChatGPT. Analysts are enthusiastically optimistic about the potential of the AI industry, and Bloomberg Intelligence predicts that it will be on the scale of 1.3 trillion dollars by 2032.
If this prediction proves almost accurate, it is the leading manufacturer of the specific types of powerful graphics processing units (GPUs) required to run and train these advanced algorithms $NVIDIA(NVDA.US$ For them, this is an incredible opportunity. Currently, NVIDIA has a market share of 80% or more in this hot niche field where demand exceeds supply.
NVIDIA $Advanced Micro Devices(AMD.US$ Ya $Intel(INTC.US$ While competition with rival chip manufacturers such as these is intensifying, market share is protected by constant improvements to software solutions such as CUDA (Compute Unified Device Architecture), which is a computing platform and programming interface custom-ordered for use with in-house hardware, and products provided. According to Chief Executive Officer Jensen Huang (CEO), the company will release a new family of AI chips updated once a year (from the conventional pace of once every 2 years) in the future, making it even more difficult for rivals to catch up.
2. NVIDIA is not overpriced for fundamentals
The second bullish fact about NVIDIA is its evaluation. Despite rising more than 3,000% over the past five years, the stock price is still reasonably priced compared to the company's impressive growth rate.
The future stock price-earnings ratio (PER) ratio is only 48 times, and NVIDIA's stock price is not that expensive compared to other popular AI hardware brands such as AMD with 47 times PER. Considering this point, AMD's sales in the first quarter increased by only 2% compared to the same period last year, while NVIDIA's sales exploded with a 262% increase.
This evaluation suggests that if the AI industry meets analysts' expectations, there is room for NVIDIA's stock price to rise further.
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