From Nasdaq:

Nvidia’s data center graphics cards have been driving rapid growth in the company’s top and bottom lines due to their use in training large language models (LLMs) for artificial intelligence (AI). Microsoft-backed OpenAI’s ChatGPT was trained using 30,000 of Nvidia’s A100 data center GPUs, leading to increased demand for their AI chips, particularly the flagship H100 data center GPU. Reports suggest the H100 could generate at least $50 billion in revenue for Nvidia in 2024, with forecasts estimating 550,000 units shipped in the same year.

Market research firm Omdia reported that Nvidia sold half a million units of the H100 in the third quarter of fiscal 2024, potentially generating $12.5 billion in revenue at an average selling price of $25,000 per unit. Nvidia’s total revenue from its data center segment was $14.5 billion last quarter, supporting estimates of 1.5 million H100 units sold in 2023 and projected 2 million units to be shipped in 2024, potentially leading to $50 billion in revenue for the company.

Analysts estimate a 150% increase in Nvidia’s AI GPU shipments in 2024, with the potential for 3.75 million units of the H100 to be sold, resulting in more than $93 billion in revenue. Given the company’s expected total revenue of $92 billion in the new fiscal year, Nvidia could exceed growth expectations, making it an attractive investment option. The stock’s forward valuation suggests it may be undervalued, with a forward P/E ratio and sales multiple lower than historical averages, and anticipated earnings per share (EPS) growth at 102% annually.

Despite missing the Motley Fool Stock Advisor team’s list of top 10 stocks to buy, Nvidia remains a promising investment, with significant potential for growth in 2024 and beyond. The company’s forward P/E ratio and PEG ratio indicate favorable valuations, making it a worthwhile consideration for investors looking for a leading AI stock.



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