Investors debate Nvidia's AI chip demand sustainability and high valuation

From NASDAQ.: 2024-06-27 10:29:36

Nvidia’s stock faces volatility as investors question the sustainability of the chipmaker’s AI accelerator chip demand. Revenue doubled last fiscal year to $61 billion, with projections for another doubling this year. Concerns about AI delivering expected returns and Nvidia’s high valuation remain. Shares plunged 13%, erasing $430 billion market value, but rebounded.

Nvidia’s key customers – Microsoft, Meta, Amazon, Alphabet – invested over $150 billion in AI technology, boding well for Nvidia’s stock. Analysts caution that returns on these investments must justify ongoing spending. Optimism remains strong among investors like John Belton, despite market uncertainties highlighted by Micron Technology’s forecast.

Tech giants’ continued investments in AI technology, like Amazon’s new online storefront and SoftBank’s Vision Fund backing AI startups, bolster Nvidia’s prospects. Although concerns linger about AI’s long-term impact, Nvidia’s position in the forefront of AI technology garners attention from investors and industry watchers.



Read more at NASDAQ.: Analysts Debate Nvidia’s Long-Term Prospects Amid AI Investment Surge