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Nvidia: This new product will change everything (rating upgrade)
Nvidia Corporation's CES announcement, including new AI hardware and partnerships, demonstrates a bright future for AI and encourages upgrades in purchasing evaluations.
The launch of Project DIGITS, an affordable AI supercomputer, could democratize AI and potentially add billions of dollars in revenue for Nvidia.
Nvidia's partnership in self-driving cars and Robotics emphasizes leadership in the next evolution of AI, enhancing long-term growth prospects.
Despite market challenges, Nvidia's valuation remains attractive, with significant growth potential, making it an appealing investment opportunity.
I am James Hood. I am an economist with a global approach to investment. I lead the investment group The Pragmatic Investor, and its focus is to build a resilient and truly diversified portfolio that consistently maintains and grows wealth.
The launch of Project DIGITS, an affordable AI supercomputer, could democratize AI and potentially add billions of dollars in revenue for Nvidia.
Nvidia's partnership in self-driving cars and Robotics emphasizes leadership in the next evolution of AI, enhancing long-term growth prospects.
Despite market challenges, Nvidia's valuation remains attractive, with significant growth potential, making it an appealing investment opportunity.
I am James Hood. I am an economist with a global approach to investment. I lead the investment group The Pragmatic Investor, and its focus is to build a resilient and truly diversified portfolio that consistently maintains and grows wealth.
NVIDIA Corporation (NASDAQ:NVDA) showcased some new products at the CES convention in Las Vegas not long ago, and the market has sold the news so far, but there are definitely plenty of exciting things to look forward to.
CEO Jensen Huang's keynote speech was particularly interesting. He outlined the roadmap for technology over the next few years and emphasized the next evolution of AI.
It is evident that Nvidia is working very hard to stay ahead of the curve, and I believe it is paying off.
Specifically, Nvidia has announced new AI hardware that can take AI and Nvidia's revenue to the next level.
Nvidia has also introduced new AI models that can lay the foundation for the next stage of AI evolution.
I tried to remain calm and be critical of the exaggerated advertising of AI, but now it is clear that we are at a very early stage of this technology. Nvidia will dominate the market today and for many years to come.
In the previous article, Nvidia was rated as a Sell due to concerns about the slowdown in AI demand. However, since AI has not yet reached many fields and applications such as robotics, this may be short-sighted.
I am upgrading to Buy the stocks.
Unboxing of the CES event
Chip stocks kicked off the year in grand style with many new products and projects announced at the CES event in Las Vegas.
Of course, most eyes were on Nvidia and Jensen, who delivered the keynote address. Here is a brief overview of the announcements.
New Chips
The GeForce RTX 50 series GPU features Nvidia's Blackwell. These chips include DLS44 technology and use AI multi-frame technology to enhance efficiency. The price of the RTX 5090 is $1,999, while the more affordable RTX 5070 is priced at $549.
New Automobile Partnerships
Nvidia also announced new partnerships with major auto players like Toyota. The company will develop self-driving cars using Nvidia's DriveOS. Nvidia is also partnering with Aurora to develop self-driving trucks.
Project DIGITS
CEO Jensen Huang's keynote speech was particularly interesting. He outlined the roadmap for technology over the next few years and emphasized the next evolution of AI.
It is evident that Nvidia is working very hard to stay ahead of the curve, and I believe it is paying off.
Specifically, Nvidia has announced new AI hardware that can take AI and Nvidia's revenue to the next level.
Nvidia has also introduced new AI models that can lay the foundation for the next stage of AI evolution.
I tried to remain calm and be critical of the exaggerated advertising of AI, but now it is clear that we are at a very early stage of this technology. Nvidia will dominate the market today and for many years to come.
In the previous article, Nvidia was rated as a Sell due to concerns about the slowdown in AI demand. However, since AI has not yet reached many fields and applications such as robotics, this may be short-sighted.
I am upgrading to Buy the stocks.
Unboxing of the CES event
Chip stocks kicked off the year in grand style with many new products and projects announced at the CES event in Las Vegas.
Of course, most eyes were on Nvidia and Jensen, who delivered the keynote address. Here is a brief overview of the announcements.
New Chips
The GeForce RTX 50 series GPU features Nvidia's Blackwell. These chips include DLS44 technology and use AI multi-frame technology to enhance efficiency. The price of the RTX 5090 is $1,999, while the more affordable RTX 5070 is priced at $549.
New Automobile Partnerships
Nvidia also announced new partnerships with major auto players like Toyota. The company will develop self-driving cars using Nvidia's DriveOS. Nvidia is also partnering with Aurora to develop self-driving trucks.
Project DIGITS
Nvidia also announced the launch of Project DIGITS, an AI supercomputer capable of independently running 200 billion parameters. This supercomputer is priced at a very affordable $3000, helping reduce the cost of AI usage and dependency on cloud solutions.
Cosmos model
Finally, Nvidia announced Cosmos, an AI model designed to create photorealistic videos and images. The idea is to use these to create a virtual environment where autonomous systems can be trained. The importance of this advancement will be explained in the following section.
Nvidia: Democratizing AI
The market decided to sell the news, causing Nvidia to drop by 6% on Tuesday. However, given these exciting announcements, this sell-off could present an excellent opportunity to add more Nvidia stocks or initiate positions.
The potential for widespread adoption of AI supercomputers is particularly attractive.
Digits will feature the GB10 Grace Blackwell Superchip that can deliver 1 petaflop of AI performance. This enables users to run large language models with up to 200 billion parameters, and connecting two Digits using Nvidia's ConnectX technology doubles that.
Putting this in context, ChatGPT 3.5 had 175 billion parameters. While the latest version has more, version 3.5 remains very powerful, allowing developers to tap into this power from their laptops without relying on cloud infrastructure.
Placing an AI supercomputer on the desk of every data scientist, AI researcher, and student enables them to engage with and shape the era of AI.
Source: Founder and CEO of NVIDIA, Jensen Huang.
The impact on NVIDIA is huge, and Digits believes it has the potential to dominate the market. The value of AI has now become clear to us, and it is largely limited to large corporations.
The Digits could democratize AI and be an absolute bargain for those looking to profit from AI use at $3,000.
Crunching the numbers
According to Marketresearchfuture, the AI supercomputer market is expected to grow at a CAGR of 19.18% from now until 2034, reaching a size of $38.79 billion by 2034.
This is not a small amount, and if NVIDIA dominates this market, it could add billions in revenue annually.
However, these estimates may appear very conservative.
Cosmos model
Finally, Nvidia announced Cosmos, an AI model designed to create photorealistic videos and images. The idea is to use these to create a virtual environment where autonomous systems can be trained. The importance of this advancement will be explained in the following section.
Nvidia: Democratizing AI
The market decided to sell the news, causing Nvidia to drop by 6% on Tuesday. However, given these exciting announcements, this sell-off could present an excellent opportunity to add more Nvidia stocks or initiate positions.
The potential for widespread adoption of AI supercomputers is particularly attractive.
Digits will feature the GB10 Grace Blackwell Superchip that can deliver 1 petaflop of AI performance. This enables users to run large language models with up to 200 billion parameters, and connecting two Digits using Nvidia's ConnectX technology doubles that.
Putting this in context, ChatGPT 3.5 had 175 billion parameters. While the latest version has more, version 3.5 remains very powerful, allowing developers to tap into this power from their laptops without relying on cloud infrastructure.
Placing an AI supercomputer on the desk of every data scientist, AI researcher, and student enables them to engage with and shape the era of AI.
Source: Founder and CEO of NVIDIA, Jensen Huang.
The impact on NVIDIA is huge, and Digits believes it has the potential to dominate the market. The value of AI has now become clear to us, and it is largely limited to large corporations.
The Digits could democratize AI and be an absolute bargain for those looking to profit from AI use at $3,000.
Crunching the numbers
According to Marketresearchfuture, the AI supercomputer market is expected to grow at a CAGR of 19.18% from now until 2034, reaching a size of $38.79 billion by 2034.
This is not a small amount, and if NVIDIA dominates this market, it could add billions in revenue annually.
However, these estimates may appear very conservative.
The current value of the PC market is $222 billion and is expected to exceed $344 billion by 2030. In five years, how many of these will be computers with AI? And out of these, how many will be supplied by NVIDIA?
Even if one-fourth of PCs are equipped with AI, it will become an $86 billion market. Considering Nvidia could capture 50% of this market, which would account for about 90% of the GPU market share, it doesn't seem unreasonable. Nvidia may increase its revenue by over $40 billion by 2030.
This is just the first step.
However, there is more to this than meeting the AI. Putting AI supercomputers in the hands of all AI developers is just the first step.
Even if one-fourth of PCs are equipped with AI, it will become an $86 billion market. Considering Nvidia could capture 50% of this market, which would account for about 90% of the GPU market share, it doesn't seem unreasonable. Nvidia may increase its revenue by over $40 billion by 2030.
This is just the first step.
However, there is more to this than meeting the AI. Putting AI supercomputers in the hands of all AI developers is just the first step.
Jensen Huang could have said it louder, but he couldn't have been clearer. Physical AI is the next evolution of AI, especially for self-driving cars and Robotics. Ultimately, this is something that will take automation to the next level.
Nvidia's Digits is just one of Nvidia's initial attempts to introduce AI into the physical world. With AI-powered computers, the only limitation is how Robotics and motion sensing interact with the physical world.
This is also why Jensen emphasized partnerships with Auto Manufacturers. The self-driving technology developed by these vehicles will lay the foundation to develop the technology needed for fully automated Robots that can operate in various industries from Logistics to high-tech medical.
評価
Despite all these possibilities and recent market actions, Nvidia may be expected to be traded at absurd valuations, but that is not the case.
Nvidia's Digits is just one of Nvidia's initial attempts to introduce AI into the physical world. With AI-powered computers, the only limitation is how Robotics and motion sensing interact with the physical world.
This is also why Jensen emphasized partnerships with Auto Manufacturers. The self-driving technology developed by these vehicles will lay the foundation to develop the technology needed for fully automated Robots that can operate in various industries from Logistics to high-tech medical.
評価
Despite all these possibilities and recent market actions, Nvidia may be expected to be traded at absurd valuations, but that is not the case.
The market seems happy to place a premium on technological items, even ones as speculative as quantum computing.
Still, Nvidia shows no signs of taking its foot off the pedal, continuing to provide high-profit growth.
With a PEG of 0.24 and a forward PEG of 1.24, the company appears to be undervalued. Owning a company with such potential seems very reasonable, at least at such a reasonable price.
Risk
There is no risk-free investment, and Nvidia is not exempt from risks. Ultimately, Nvidia relies heavily on significant investments in AI from corporations and individuals. This requires two things:
Available funds can be invested in AI.
Return on investment from AI.
Several strong years for the economy ahead, especially with ample funding available to major tech companies. However, changes in the macroeconomic environment could quickly alter the willingness to invest billions of dollars in Nvidia's AI chips.
Furthermore, we have not yet seen the full benefits of AI. I personally believe that empowering individuals with this technology can bring significant benefits, but there may be resistance from the public and regulatory authorities.
Final thought
In conclusion, Jensen has done a good job of showing what the future of AI looks like. Nvidia's CEO is clearly at the top, and I am confident that Nvidia can continue to deliver. At today's prices, having at least some exposure to Nvidia is, of course, as easy as owning a piece of the S&P 500.
Still, Nvidia shows no signs of taking its foot off the pedal, continuing to provide high-profit growth.
With a PEG of 0.24 and a forward PEG of 1.24, the company appears to be undervalued. Owning a company with such potential seems very reasonable, at least at such a reasonable price.
Risk
There is no risk-free investment, and Nvidia is not exempt from risks. Ultimately, Nvidia relies heavily on significant investments in AI from corporations and individuals. This requires two things:
Available funds can be invested in AI.
Return on investment from AI.
Several strong years for the economy ahead, especially with ample funding available to major tech companies. However, changes in the macroeconomic environment could quickly alter the willingness to invest billions of dollars in Nvidia's AI chips.
Furthermore, we have not yet seen the full benefits of AI. I personally believe that empowering individuals with this technology can bring significant benefits, but there may be resistance from the public and regulatory authorities.
Final thought
In conclusion, Jensen has done a good job of showing what the future of AI looks like. Nvidia's CEO is clearly at the top, and I am confident that Nvidia can continue to deliver. At today's prices, having at least some exposure to Nvidia is, of course, as easy as owning a piece of the S&P 500.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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