From Nasdaq: 2024-05-01 07:30:00

Nvidia is now the third-largest company in the world, valued at around $2 trillion, with Alphabet and Meta Platforms close behind. However, Nvidia’s GPUs are being challenged by company-specific hardware like Alphabet’s tensor processing units and Meta’s Meta Training and Inference Accelerator. This trend may impact Nvidia’s future growth and market cap by 2030.

Nvidia’s revenue comes from one-time GPU purchases, leading to potential sustainability issues in the future as refresh cycles occur every few years. With a current demand spike for AI models, Nvidia is experiencing unprecedented sales, but it remains uncertain if this trend will continue or if demand will peak soon. This uncertainty could affect Nvidia’s market cap in the long term.

In contrast, Alphabet and Meta have recurring revenue models based on advertising on their platforms. While both companies invest heavily in AI and innovative technologies, they primarily use AI to enhance advertising effectiveness. This approach may lead to more stable revenue streams compared to Nvidia, whose revenue is subject to more fluctuations in the chip business and AI model development.

While all three companies recently reported record revenue figures, Nvidia’s revenue historically experienced more significant drops during cyclical downturns than Alphabet and Meta. As a sales drop is anticipated for all three companies, the impact on Nvidia’s market cap may be more severe due to weaker future demand for its products compared to that of Alphabet and Meta. This trend suggests that Alphabet and Meta may surpass Nvidia in size by 2030.

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Read more at Nasdaq: Prediction: These 2 AI Stocks Will Be Worth More Than Nvidia by 2030