From Nasdaq: 2024-06-23 10:00:00

Nvidia (NASDAQ: NVDA) is dominating the stock market with its superior H100, A100, and Blackwell semiconductor chips, leading the way in generative AI applications. However, the company’s under-the-radar businesses in compute and networking, including data center, robotics, and AI, are gaining traction and contributing significantly to its revenue growth.

Nvidia’s compute and networking segment saw a 408% year-over-year increase in revenue to $22.7 billion in the first quarter of fiscal 2025. This growth is driven by the popularity of its CUDA platform, which enables software developers to work in parallel with Nvidia’s GPUs. As Nvidia holds an 80% market share in AI-powered chips, CUDA has become a crucial service for the company.

CUDA’s importance lies in its ability to provide Nvidia with a complementary software service to its hardware products, allowing the company to offer a comprehensive solution for AI development. This flexibility gives Nvidia an edge in an increasingly competitive chip industry and ensures higher profit margins through software services.

Despite Nvidia’s stock price soaring by 156% in 2024, its current P/E multiple of 74 suggests that the stock is actually less expensive than it was a year ago. With its commanding lead in the chip space and strong presence in AI development, Nvidia remains a promising long-term investment. Investors looking for exposure to the AI landscape may find Nvidia to be a solid bet for the future.

While Nvidia stock has been performing well, long-term investors should consider adding to their positions or starting a new one to capitalize on the potential growth of the company. With its focus on AI development and leading position in the chip space, Nvidia is poised for continued success in the coming years.



Read more at Nasdaq: Surprise! Nvidia Has a Secret Business Outside of Chips, and It’s Already Generating Billions of Dollars.