Nvidia Earnings Are Coming. Why It’s Time to Think About AI Chip Competition.
It isn’t an exaggeration to say the tech sector’s recent rally might depend on Nvidia beating expectations for its earnings report this week. However, stockholders in the chip maker should be looking beyond the immediate horizon and particularly at potential competitive threats.
Nvidia’s dominance in supplying the chips used to train artificial-intelligence systems is expected to shine through again when it reports January-quarter earnings on Wednesday, with its sales expected to more than triple from the prior year to more than $20 billion.
However, Nvidia’s growth rate is expected to slow from around the July quarter as it faces tougher comparisons since the beginning of massive spending on its chips.
“There’s a possibility that you could even see quarter-on-quarter declines as you start to get to the end of this massive cycle. Now, this isn’t to suggest that an Nvidia isn’t an incredibly well positioned company, but you have also competition entering the space and competition has been late,” Daniel Newman, CEO of The Futurum Group, told Barron’s $NVIDIA(NVDA.US$ $Advanced Micro Devices(AMD.US$
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