High demand for AI chips is driving Nvidia's growth, but concerns exist about potential limitations

From Nasdaq: 2024-11-27 08:45:00

Demand for AI chips, particularly Nvidia’s GPUs, is skyrocketing, with the data center segment generating over $30 billion in revenue in the third quarter alone. However, the cost to train advanced AI models is increasing, reaching up to $1 billion for the next generation. There are concerns that AI models may have hit a capability ceiling despite more data and computing power.

Nvidia has seen impressive growth due to the AI chip demand, but there are risks involved. If AI models stop improving significantly, Nvidia’s growth and profits could be affected. With a market capitalization above $3 trillion, Nvidia stock is considered a risky investment. Investors are urged to consider the potential risks and rewards.

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