10 Latest AI News You Shouldn’t Miss

2. NVIDIA Corp (NASDAQ:NVDA)

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Will Rhind from GraniteShares said while talking to Schwab Network that he believes NVIDIA Corp (NASDAQ:NVDA) has almost no competition and the company has a bright future ahead.

“NVIDIA Corp (NASDAQ:NVDA) continues to be the market leader in AI. Its position really is so far out in front that it’s difficult to foresee any credible competitor in the short to medium term.

That is why, as David made reference to just then, there has been some interference from the US government, the French government, and now the Chinese government inquiring about sort of monopolistic-type practices because their position is so advanced.

I think that the future for NVIDIA Corp (NASDAQ:NVDA) next year is actually very bright. I think that we’ll find a way past these sorts of investigations, especially with, you know, Musk, his involvement with the Trump administration. And I think we see a $4 trillion-plus market cap for NVIDIA Corp (NASDAQ:NVDA) next year.”

Simply beating earnings estimates is not enough for NVIDIA Corporation (NASDAQ:NVDA) anymore, and the impact of high expectations will continue to weigh on the stock as growth cools.

An EPS surprise of 8.5% was not able to help the stock in the most recent earnings. A similar trend occurred following the second-quarter earnings after a 5.6% EPS surprise. It’s difficult to see Nvidia maintaining a mid-70s gross margin by the end of 2026. Over the last two quarters, Nvidia has already reported a drop in its gross margin from 78% to 74.5%.

Then there’s competition. Amazon (AMZN) recently disclosed its Trainium 3 chip, which is set to be released by the end of 2025. The chip is expected to be twice as fast with 40% more power efficiency than the previous generation, manufactured on TSMC’s (TSM) cutting-edge N3 technology. Reportedly, technology giant Apple (AAPL) will be a consumer of Amazon’s new silicon.

Manole Capital Management stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2024 investor letter:

“As of this publication, Nvidia is up roughly 150% year-to-date. NVIDIA Corporation (NASDAQ:NVDA) was the largest gainer in the S&P 500 last year and has more than tripled in value over the last year. It hit an eye-opening market capitalization of $3 trillion in June, less than four months after it eclipsed the $2 trillion mark. Enthusiasm for everything AI-related, especially for the primary chip maker whose products are essential to powering AI technology, continues to fuel the market. Last quarter, and for the fifth consecutive quarter, Nvidia reported sales and profits that blew past Wall Street expectations. The stock rose +37% in the second quarter alone.”