Preliminary Justifications for Investing in Nvidia Shares Amidst the Commencement of the UBS Global Technology and AI Event
Preliminary Justifications for Investing in Nvidia Shares Amidst the Commencement of the UBS Global Technology and AI Event
Nvidia, the tech giant known by its ticker symbol NVDA, seems to be caught in a predicament of its own success. After a stellar Q3, doubling its earnings per share year over year, the tech behemoth witnessed its share price dropping in the following days. It's a common scenario for Nvidia, as its stock plummeted nearly 20% after its last earnings release, only to bounce back robustly and surge close to 35% from the previous low.
This isn't an unfamiliar ordeal for Nvidia. Their stock often suffers moments of temporary weakness, following impressive earnings reports, only to rally back later. The next year looks promising for Nvidia with several catalysts on the horizon.
On December 3rd, Nvidia attended the UBS Global Technology and AI Conference, joining other pioneering AI companies. This annual event offers an opportunity for Nvidia to showcase its leadership and drive home the point that the sky is the limit for its stellar growth. The event emphasizes the practical and transformative impact of AI in creating real-world value.
Even with other events sporting the potential to move the needle, every opportunity for Nvidia (and the AI industry as a whole) to make its case is significant. Based on several key factors, here are three reasons why Nvidia is worth considering as an investment as the event kicks off.
Nvidia's Hardware Remains Unchallenged
It's no secret that the AI market is burgeoning and the future looks bright. A study from PwC estimates AI can add $15.7 trillion to the global economy by 2030, while Statista forecasts a CAGR of 28.3% for the AI market up to 2030. Silicon Valley CEOs have pledged billions to invest in AI infrastructure.
Nvidia's dominance in the AI hardware market is likely to continue. With their chips serving as the backbone of the industry, Nvidia's pole position in the AI market doesn't seem tenable. Only AMD might pose a challenge, but it's highly unlikely that they will surpass Nvidia's flagship chips. Nvidia possesses substantial resources that they can employ to defend their position.
Blackwell: The Next Big Thing
Nvidia's latest addition to its Superchip series, Blackwell, is already creating a buzz. Samples of the powerful chips are making their way into the hands of major clients, and demand is reportedly at a fever pitch. Nvidia CEO Jensen Huang has described the demand as "staggering," and the company is predicted to sell out of the chips for a full year.
This launch marks a pivotal moment for Nvidia, and how successfully they pull it off can make or break investor confidence. If they pull off a smooth delivery, their stock is likely to appreciate.
The Future is Agentic AI
Agentic AI is an emerging trend in the industry, consisting of AI that can operate autonomously and make decisions based on environmental factors. Jensen Huang refers to these AI agents as "co-workers" that can significantly boost employee productivity.
Nvidia is at the forefront of this trend. It aims to become a leader in the development and adoption of agentic AI, utilizing its platform to develop AI copilots for various industries.
With its proven track record, groundbreaking technology, and innovative approach, Nvidia is well-positioned to capitalize on the growing AI market, making it an intriguing investment opportunity.
After the successful Q3 earnings report, investors might consider funding in Nvidia, given its promising future in the AI market. According to a PwC study, AI can add $15.7 trillion to the global economy by 2030, and Nvidia, with its dominance in AI hardware, is well-equipped to capitalize on this growth. The company's latest addition to its Superchip series, Blackwell, has generated significant demand, making a successful delivery crucial for investor confidence. Additionally, Nvidia's efforts in agentic AI, or AI that operates autonomously, could put it at the forefront of a new trend, further solidifying its position as an attractive investment opportunity.