For what length of time will Jensen Huang, the CEO of Nvidia (NVDA.O), continue to hold the position of leading provider of AI processors in the computer industry?
When Huang, who co-founded Nvidia in 1993 and has been CEO ever since, steps foot on stage of a Silicon Valley hockey rink on Monday to reveal new flagship products, the question of how long it will take will be crucial. It might be months, years, or even decades.
It’s the company’s annual developer conference, which takes place in person for the first time since the outbreak. About twice as many individuals who attended the 2019 exhibition in person are expected to attend Nvidia’s GTC event, with 16,000 expected to do so.
After surpassing $2 trillion in market capitalization towards the end of February, Nvidia is currently just $400 billion away from overtaking Apple (AAPL.O) as the second most valuable firm on Wall Street, only behind market leader Microsoft (MSFT.O).
Analysts predict that as businesses buy up Nvidia’s top-of-the-line chips by the tens of thousands to power chatbots, picture generators, and other AI systems, the company’s revenue would rise 81% this year to $110 billion.
That is twice the amount of sales analysts anticipate from chipmaker Intel (INTC.O), which led the personal computer boom. Whether Nvidia can leverage its recent, significant lead in AI computing to establish long-term supremacy in a new computing era is the question.
The B100, or Nvidia’s next generation of high-end AI chip, is expected to be at the center of that endeavor, according to analysts. The chip, which is expected to begin delivering later this year, will be the brains behind the AI systems that Nvidia offers.
Software engineers must wait months to use AI-optimized computers at cloud providers due to a shortage of Nvidia’s current AI chips.
Pricing details are unlikely to come from Nvidia, but the B100 is probably going to be more expensive than its predecessor, which retails for over $20,000.
The shares of Nvidia increased by 83% in 2024, having more than tripled the previous year. Nvidia’s stock is currently priced at 34 times its predicted earnings, even after that explosive surge.
Analysts‘ drastically increased projections of Nvidia’s future earnings are what caused the chipmaker’s PE valuation to drop. If these projections prove to be overly optimistic, Nvidia’s stock might crash back to earth.
On Wednesday, the shares closed at $908.88, down 1.1%.
Regarding Nvidia’s recent financial performance, Bernstein analyst Stacy Rasgon stated, “The biggest concern is the numbers have just gotten so big, so quickly, you just worry they can’t last.” “The more new products they’ve got coming out at higher performance and higher prices, the more runway they have.”
