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Nvidia Stock Prediction, From Someone Who Has Invested for Decades

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  • It is clear that the great winner of the first stage of the artificial intelligence revolution (AI) was Nafidia.

  • With the high temperature of the competition in the artificial intelligence chips market, cloud services providers can benefit.

  • 10 shares we love better than Nvidia ›

In just a few years, Nafidia (Nasdaq: nvda) Become Elderly Arrows in the world. In fact, as of writing this report, the company is a maximum of more than $ 3.5 trillion, only a little appendix Microsoft As the largest company in the world according to the maximum market.

The engine that prompted the shares of NVIDIA to these amazing high heights in this field was Graphics processing units (graphics processing units)any Preferred By artificial intelligence developers (AI) for their strength and speed.

However, while the revolution of artificial intelligence revolves aroundOther companies may replace Nafidia. Regardless of the inevitable battle of GPU market shareOther companies may Be in a better position To take advantage of the next The stages of the artificial intelligence revolution. There is one arrow that tells me the investment contracts that must be seen.

Amnesty International chip on a black mother's painting.
Photo source: Getty Images.

There are two things that stand From about the rise in NVIDIA over the past three years: growth of revenues and margin.

First, the company’s revenues simply He went through the ceiling as the artificial intelligence revolution took a journey. In 2022, NVIDIA achieved about $ 27 billion of revenues. As of the last quarter (for a period of three months ending on January 26), the company reported the revenue of $ 130 billion. This is shocking rapid growth, that is why It is often cited for a reason The NVIDIA share price is offered by more than 800 %.

butIn addition to the growth of amazing revenuesThe company’s margins widened. In 2022, the company’s total margin reached about 60 %. Today, about 70 %. This is excellent and is very excited by the company’s traditional competitors Provide small devices and Intel.

NVDA total profit scheme
NVDA total profit margin Data by Ycharts

However, like all good things, this total margin dominance will to Come to It ends in some a point, With high temperatures. AMD and Intel will not improve their designs and take the market share, but new competitors will enter the market. Players with depths such as alphabetand Amazonand Microsoftand Definition platformsAnd apple All of them work on their Amnesty International SIM Designs This may eventually eat NVIDIA margins.

So, because this market for artificial intelligence chips becomes more saturated, who will benefit? My investment instincts indicate a senior buyer of artificial intelligence chips.

Ultimately, the principles of the basic economy say that the buyer of artificial intelligence chips will benefit because the artificial intelligence chips market becomes more competitive. That is, like the price of artificial intelligence chips He fallsCompanies that buy most chips will save money, which leads to high profits.

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