Nvidia has a market cap of $3 trillion today. We believe Nvidia will reach a $10 trillion market cap by 2030 or sooner through a rapid product road map, it’s impenetrable moat from the CUDA software platform, and due to being an AI systems company that provides components well beyond GPUs, including networking and software platforms.Copyright 2024 The Associated Press. All rights reserved
This lends itself to the question, what do I foresee next for Nvidia, and how am I approaching this heavy hitter in AI. My firm champions full transparency by issuing trade alerts for every buy and sell we make; thus, I’ve included at the end a transparent discussion on how my firm is managing our position today.. As you’ll see from the key points to my thesis, there is a bull case where a $10T market cap estimate in a little over six years’ time is not high enough.
If this estimate materializes, Nvidia’s data center segment will be at $320 billion in 2027, up from data center run rate of $90 billion today, with consensus at roughly $145 billion data center segment by end of calendar year 2025 .
Below, I take you through the key points from each generation, including the moment Nvidia transitioned from being a GPU chip company and a gaming company to become the AI systems company that is powering a $15 trillion economy.In 2016, Pascal featured 7.2 billion transistors and increased CUDA cores compared to the previous generation, Maxwell. CUDA cores are parallel processors that can perform complex calculations and execute tasks on graphics cards much faster than a central processor.
Tensor cores handle tensor and matrix operations, resulting in higher performance for neural networks. I began to call Nvidia “secular” with this release and it’s when I doubled down on my conviction by taking my thesis from behind the paywall to the public, statingNvidia not only became secular in revenue, but it’s secular-level gains have surpassed the world’s most celebrated software companies since Ampere.semiconductors have gone through a deep, cyclical trough industry-wide over the past 8 or so quarters while Nvidia powered higher with historical beats/raises.
. The A100 offers the ability to scale-up multiple GPUs for one giant GPU using components such as third-gen NVLink to double GPU-to-GPU bandwidth, NVSwitch which is leveraged for fast data transfers, plus InfiniBand and SmartNICs following the Mellanox acquisition.Hopper is when Wall Street became aware of Nvidia’s AI story.
The H100 stands apart with the leap in performance of 3X more performance than the A100 and is up to 6X faster. Although there are many highlights to consider with the H100, the biggest breakthrough was the transformer engine as it allowed generative AI to come to market. The full analysis is worth a read as it spells out how Nvidia will drive growth through the end of 2025 and why I think current data center estimates are too low. In fact, I wrote that prior to the last earnings report and analysts are already proving me correct as FY2026 have been revised up by a whopping $20 billion since I wrote that only three weeks ago!of $20 billion on the data center.
The B200 will also have 20 petaflops of FP4 compared to the H100’s 4 petaflops of FP8 reaching 32 petaflops of FP8 in the DGX H100 systems. The difference is that the smaller bit size allows for an economical way to achieve more speed when giving up a small amount of accuracy doesn’t make a critical difference. As discussed, this also helps in the face of a slowing Moore’s Law.
Now, imagine cutting the time in half by producing four generations of AI systems in 4 years instead of 8 years.A good chunk of the AI accelerator story is understood at this point.
As of now, Nvidia stock should be watched closely between $1225 to $1315. It’s crystal clear that Nvidia owns the AI market, yet the stock will need the broad market to be aligned for its phenomenal run to continue. We’ve been tracking the fading Mag 7“when the cycle leaders start to underperform, it tends to mark the start of a trend change. The FAANGs have been the undoubted leaders of this bull run, and we are now seeing them start to trend lower against the indexes.
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