From Nasdaq: 2025-05-28 07:47:00

Over the last decade, Nvidia’s shares have surged by over 23,000%, showcasing the immense wealth created within the American technology sector. However, with a market cap of $3.2 trillion, Nvidia faces challenges in sustaining such growth. The future of this chipmaker remains uncertain as it navigates the evolving landscape of technology.

Generative AI has become the dominant force in Nvidia’s operations, with the data center segment accounting for a staggering 91% of its $39.3 billion in sales. Analysts predict generative AI to drive $1.1 trillion in revenue by 2028. Yet, the industry’s profitability remains uncertain, posing risks to Nvidia’s future success.

Despite the excitement surrounding AI, companies like OpenAI are struggling to turn a profit. While revenue tripled to $3.7 billion in 2024, losses ballooned to $5 billion. Competitors like DeepSeek in China are developing AI models at a fraction of the cost, challenging the economic viability of early leaders like Nvidia.

Nvidia’s future growth may be hindered by hardware challenges and geopolitical tensions. The company faces restrictions on selling its chips to Chinese clients, prompting the need for a compliant chip. Rivals like Huawei are positioning to capitalize on market share, adding pressure on Nvidia’s business prospects.

While Nvidia remains a major player in the AI industry, new investors should not expect the same exponential returns seen in the past. The company faces complex challenges in both software and hardware development, indicating a slower path to growth. Consideration is advised before investing in Nvidia amidst changing industry dynamics.



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