The Unmatched Power of Nvidia in AI Innovation | Nvidia Stock | NVDA Stock | NVDA

a fresh read from the trips this morning taian Taiwan semi reporting a 45% jump in July Revenue compared to last year that was thanks to strong demand for the company's AI chips Shares are well they're bouncing around along the Flatline here but a big outperformer on the year okay one of their key customers of course is NVIDIA and that stock has been whipsaw this week it's coming off what is its best day this month but the company has shed about a trillion dollars in market cap since mid June when it was at its highs let's get more on that name and a bunch of other semis joining us now is Bernstein Stacy Rasin uh Stacy always great to have you you know let's just start on Nvidia some of the news this week on the delays potentially as a result of sort of design issues around Blackwell a you know well just give me your take is it real and what's it going to mean yeah it it seems like it's real enough there's enough smoke there there's some fire we we've had some confirmation from other folks in the supply chain super micro kind of alluded to it and so it seems really it doesn't seem major right um it it seems like a a relatively minor design issue looks like they may have already fixed it we've got um uh maybe a 2 to three month delay I think what that really means is where people were hoping that like real volume shipments would happen in calendar Q for it looks like it may be q1 so it's a slight push out you have to remember this stuff is is difficult to do so I mean like even even Nvidia is not necessarily immune to it in the meantime though like we've had hyperscale capex guides that are all still going up um all of those would have Incorporated whatever is going on like they didn't just find out about this you know because of the the news stories they would have Incorporated it and invid has got strong demand for their existing architecture which is called Hopper and it looks like they're they're likely increasing production of that to try to backfill on and smooth things over until we actually get the Blackwell um launching uh in more volume maybe a quarter later but structurally I don't think it's it's it's that big of an issue now now sentiment wise clearly it's it's it's impacted the stock I think the stock things one was there's just been a a general reduction of sentiment on the AI space in general people are just starting to look at lots of dollars are getting spent they're wondering about where's the return so the sentiment wasn't you know quite as supportive as it it had been and then you have this on top of it which which weighs on it so I mean that that's kind of what's been going on but structurally I don't know that anything really has changed with Nidia we got a little push out I think it'll be okay all right well right I mean demand is demand it's still there as you similar to Apple Nvidia demonstrates that having strong software skills is just as important as having strong Hardware skills for growth although Nvidia is well known for producing AI chips its main building block is a commercial wall that keeps clients in and Rivals out this barrier is composed as much of silicon as it is software similar to Apples Nvidia has built what is referred to as a Walled Garden in the IT world over the last 20 years Nvidia has always concentrated on the programmers who create artificial intelligence systems and other soft software using its chips whereas Apple targets its ecosystem of services and software at customers because of its Walled Garden Nvidia is unlikely to lose a significant portion of the AI industry in the upcoming years especially in the face of competition from rival chip manufacturers and even from internet behemoths like Google and Amazon it also clarifies why competitors of Nvidia are rushing to create software that can get past the company's defenses and why in the long run the competition for market share that Nvidia currently controls is likely to Center on the company's coding skills rather than just the design of its circuits the qda software platform is essential to comprehending nvidia's Walled Garden this platform which debuted in 2007 provided a solution to a challenge no one had yet encountered running software without Graphics utilizing invidious specialist chips which were made for labor intensive applications like 3D graph graphics and video games for tasks like Mining cryptocurrencies and encrypting data on those chips referred to as Graphics processing units or gpus QD Day made it possible to do a wide range of additional computation as software is one of the apps that Cuda enabled nvidia's chips to run and its rapid development in recent years has elevated Invidia to one of the most valuable firms in the world crucially remember that Cuda was only the start year after year Nvidia produced specialized code libraries in response to the demands of software developers which made it feasible for a vast range of activities to be completed on its gpus at speeds that were not achievable with traditional general purpose processors like those produced by AMD and Intel with all these developments under consideration and analyst predictions we'll talk about Target projections and advice in today's video so make sure not to miss out however before you do if you'd like to stay up toate on VI's most recent updates and the most recent news from the stock market you can subscribe to our Channel we publish daily updates about the biggest shifts in Market catalysts so click the Bell icon button to ensure you don't miss the most recent updates all right back to today's video about the stock itself and the multiple and the you know what we've seen in terms of that and whether that makes it even more compelling I guess from the perspective of somebody like yourself yeah look so it nvidia's never really been all that expensive I mean even at its peak it was maybe 40 times forward earnings the cells side forward numbers that that's based on are likely still too low um 40 times is about its fiveyear median or fiveyear average so it's not actually that it's it's cheaper now it's probably 30 times now um yeah at least I think you've deris it a little bit like going into the back half um on on the back of this and if they do announce some kind of a delay if they verify it on the call at this point it won't be everybody kind of knows about it so yeah we can kind of work through this um demand still looks really strong if you're pushing you know volume in the next year it actually makes next year look better um again more upside to the numbers hopefully yeah I I think the valuation here still still looks quite attractive okay Stacy I realize you don't actually cover this name but Applied Materials we're going to get those results next I cover Applied Materials you do okay I stand corrected okay what are you watching for there and how much of an indicator is that to the broader semi space as we do look to the second half of the year yeah so there's there's a few things people are clearly watching China semic cap demand which has been very strong um now Amad is one of the few companies in where they've actually already guided their China mix to be declining as we go into the back half and so I'd like to see if that's happening um but I think um uh the the whole like China overbuild worry is not as big of an issue for AMT maybe as it is for some of the others many of their peers have you know 50% of their revenue coming from China right now ax should be I think they they suggest should be going down to the low 30 percentage which is kind of normal for them by the end of year so we'll be watching that the other thing which I think has influenced a lot of the semic Caps recently was Intel so Intel just you nominally cut capex and that caused some angst I will say though you know in Intel took their capex guidance for this year I guess they said from 33 billion to 26 I actually had to take my capex numbers for Intel up knock down I actually don't know where that $33 billion number came from I was at 24 I had to take it up to 26 next year I took it down a little bit we had been at 24 I think we're 21 and a half now for Intel so a minor reduction but again the same thing the semic Caps would have known about whatever Intel is doing like before Intel announced it so I'm not too worried about that but those are the kind of things that people will be watching for I think with aim at as they report I think it's on the 15th of uh of uh next week for many years Nvidia has employed more software Engineers than Hardware Engineers which can be attributed to the company's emphasis on software platforms Jensen hang the CEO of Nvidia recently referred to the company's FOC focus on hardware and software as full stack Computing implying that Nvidia manufactures everything from the processors to the software needed to develop artificial intelligence every time a competitor releases AI processors designed to take onidas they are going up against systems that nvidia's clientele has been utilizing to create a ton of code for over 15 years it could be challenging to switch from that program to a Rivals platform during its June shareholders meeting Nvidia said that 3,700 GPU accelerated apps utilized by over 5 million developers across approximately 40,000 companies are supported by qda which now has over 300 code libraries and 600 a models numerous businesses have banded together to challenge Nvidia due to the Market's immense size for AI Computing analyst a Malik of City research who specializes in semiconductors and networking equipment predicts that by 2027 the market for chips related to artificial intelligence would grow to $400 billion about $61 billion was earned by Nvidia during the fiscal year that concluded in January according to Bill Pearson an Intel vice president focusing on AI for cloud computing customers a large portion of this collaboration is centered on creating open-source alternatives to qda two of these projects involve Intel Engineers arm Google Samsung and Qualcomm are involved in one the business that created chat upt open AI is currently engaged in an open-source project startups trying to create Hudda substitutes are receiving a flood of investment Capital the potential for engineers at some of the largest at companies in the world to work together to allow businesses to use any chips they choose and avoid paying what suon the industry referred to as the qda tax is one of the factors driving those Investments Gro a business that stands to benefit greatly from all of this open-source software recently revealed plans to raise $640 million at a $2.8 billion valuation in order to develop processors that rival aidas so what does this really mean for Nidia stock let's find out but first if you made it this far into the video thank you these videos take a lot of effort and time to make so if you enjoyed them please hit the like button subscribe to the channel this goes a long way in helping us grow that said back to the video AI remains worth watching segment for Global Investors in 2024 but how do you keep up with the AI sector and others that you may interested in I recommend trying Mumu a sponsor of today's video some features to discover stocks with investment potential has blown me away you can use the industry chain to find companies throughout the entire AI sector or use the stock screener to filter stocks according to your investment strategy having the the option to set parameters like industry market indicators Financial indicators technical indicators and more ultimately discover potentially undervalued stocks and those that appear to show buy signals to help inform your strategies in an effort to capitalize on ad related opportunities at the same time Mumu is one of the cheapest trading platforms I found it offers zero Commission on stocks options and EDS after comparisons I've discovered the fees are among the lowest right now new users who open an account using my link and make a qualified deposit can get up to 15 free stocks enjoy a limited time 88.1% apy on idle catch for 3 months and earn up to $300 cash reward for transferring in their portfolio these rewards can be earned together so don't miss out and thanks again to Mumu for sponsoring this portion of the video so I plan to when the stock settles Andor we get through their report on August 28th you know what I'll probably buy some more well I'm curious because because you mentioned Nvidia a lot we all do right just because it's so dominant within this space we did see a lot to like in amd's report when when we look at that road map ahead is there an opportunity for AMD for some of these other chip makers to close that leadership Gap that we have seen for so long from Nvidia you know I think that they may close the leadership Gap a bit but not significantly I mean take a look at uh AMD yes when they reported the other day they moved their guidance from $4 billion in AI chips this year to four and a half in the prior quarter they went from three and a half to four but it's still going to be a sliver an absolute sliver of what Nvidia is going to do so over time the pie will get bigger I still think that uh Nvidia will have most of the slices and hey it's a strong well managed company under Dr Lisa Sue they'll be a good second supplier but Nvidia will have a hold on this market for as far as the Giants in the tech industry are also investing in Vidia chip substitutes Microsoft declared in 2023 that it will follow suit with Amazon and Google producing their own unique processors for implementing and developing artificial intelligence AMD is one of nvidia's most effective effective rivals in the AI chip Market although amds expected $4.5 billion in revenue from its Instinct line of AI chips in 2024 is still a small portion of nvidia's market share the company is making significant Investments to attract software Engineers according to Vice President Andrew deckman of AMD we have significantly increased our software resources he claims a andd said last month that it would pay $665 million to acquire Silo ey bringing on 300 more AI Engineers significant Nvidia users meta platforms and Microsoft both purchase amd's AI chips demonstrating a desire to promote competition for one of the most expensive products in the budgets of both industry Titans however for the next 2 to three years Malik of City research predicts that Nvidia will continue to hold a 90% market share in chips connected to artificial intelligence understanding the steps in involved in creating an a similar to chat GPT without utilizing any Nvidia Hardware or software will help Wade the benefits and drawbacks of other options if he could have afforded it nvidia's hardware and software would have been the first things B Bach pivan the CEO of the startup ninja Tech ey used to create his company however nvidia's potent h100 chips are in short supply which has kept costs high and accessibility difficult eventually pivan and his fellow Founders turned to Amazon which creates its own unique chips for artificial intelligence AI training the process by which these systems learn from enormous amounts of data the team eventually trained their AI using Amazon's chips called trinium after months of work it was not simple according to pooven there were numerous difficulties and glitches for several months their ninja Tech AI team convened four times a week with the Amazon software team after the two businesses resolve their differences ninj techs AI agents which carry out tasks on behalf of users debuted in May the service is reportedly used by over a million people each month all of whom are supplied by models that have been trained and optimized using Amazon's chips the story of ninja Tech ey highlights a significant factor that is causing similar firms to suffer and need more time to develop AI outside of nvidia's Walled Garden cost according to pivan ninj Tech pays Amazon over $250,000 a month for cloud services in order to support over a million users he says it would be between $750,000 and $1.2 million if you were using Nvidia chips to run the same AI Nvidia is well aware of the intense competition it faces as well as the high cost of operating and purchasing its processors hang the CEO of the business has promised to lower low the cost of AI training on the company's Hardware with its upcoming line of a focused chips with all of these considerations Nvidia is unquestionably a great buy especially if you're looking to invest for the long term because the company hasn't reached its full potential yet what do you think about Nvidia stock is it a good buy at the current price please share your opinions with us in the comments section and don't forget to let us know what you think nvida is worth if you're interested in learning what other companies like Nvidia have been up to lately click on the next video on your screen we'll 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