The Nvidia Paradox: Skyrocketing Now, But for How Long?
Nvidia dominates the artificial intelligence industry and, as a result, all coverage of it. This is perhaps the key fact that keeps NVDA stock holders interested.
Nvidia chips and software are seen as vital for creating Large Language Models (LLMs) and calculating outputs from them.
This has given Nvidia a $2 trillion market cap and, just as important, enormous power over the industry. Investors know it, analysts know it, and so do vendors.
That’s because there are a limited number of Nvidia chips being made, against unlimited demand. There are winners here, and there are losers, too.
Dell $Dell Technologies (DELL.US)$ and Hewlett Packard Enterprise $Hewlett Packard Enterprise (HPE.US)$ both make networked servers. Both talk about their collaborationwith NVDA stock.
But only one company is getting the better of that cooperation, and that’s Dell. Since the end of August, HPE stock is down 10% while Dell stock is up 123%. HPE earnings are fallingwhile Dell earnings are rising.
The obvious reason is HPE’s inability to deliver the premium Nvidia servers that customers are demanding. Investors who bought the “value stock” of HPE, with a dividend yield of 3.34%, were caught offside. $NVIDIA (NVDA.US)$
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