4. NVIDIA Corp (NASDAQ:NVDA)
Number of Hedge Fund Investors: 179
New Street Research recently said in a note that AI infrastructure demand has no slowdown in sight and gave bullish comments about NVIDIA Corp (NASDAQ:NVDA). The firm believes Nvidia’s key advantage over its competitors like AMD is the full-stack and system-scale integration abilities of its GPUs. These allow for greater chip-to-chip bandwidth interconnect across a larger domain.
Comparing NVIDIA Corp (NASDAQ:NVDA) with AMD, New Street Research analyst Pierre Ferragu said:
“It nevertheless doesn’t disqualify AMD, whose architecture is less versatile, less scalable, but can still be competitive, but on a much more limited set of use-cases, and at the cost of dedicated optimization efforts.”
NVIDIA Corp (NASDAQ:NVDA) declines after the latest quarterly results were more or less expected amid Blackwell delay reports that were confirmed by management. However, the delays were mainly due to ta change in Blackwell GPU mask. That does not affect the main functional logic or design of the chip, according to analysts. While Blackwell has been delayed for a few months, it does not change the core growth thesis for NVIDIA Corp (NASDAQ:NVDA).
Nvidia is set to see huge growth on the back of the data center boom amid the AI wave.
At NVIDIA Corp (NASDAQ:NVDA) GPU Technology Conference in March 2024, CEO Jensen Huang estimated annual spending on data center infrastructure at about $250 billion. Over the next decade, this could total between $1 trillion and $2 trillion, depending on how long this level of investment continues. During the same Q&A session, Bank of America’s Vivek Arya echoed this estimate, suggesting the total addressable market would fall in the $1-2 trillion range, particularly as countries invest in their own AI infrastructure. By the end of the decade, spending could be at the high end of that range.
Of course, NVIDIA Corp (NASDAQ:NVDA) won’t dominate the entire $2 trillion opportunity, as it faces competition from companies like AMD and internally developed AI accelerators from Google, Amazon, and even Apple. Some analysts believe Nvidia’s data center market share between 2025 to 2029 will be over $950 billion—less than half of the total market—but still enough to make it the leader in the sector.
Ithaka US Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is the market leader in visual computing through the production of high-performance graphics processing units (GPUs). The company targets four large and growing markets: Gaming, Professional Visualization, Data Center, and Automotive. NVIDIA’s products have the potential to lead and disrupt some of the most exciting areas of computing, including: data center acceleration, artifi cial intelligence (AI), machine learning, and autonomous driving. The reason for the stock’s appreciation in the quarter was twofold: First, the stock benefi ted from tremendous excitement surrounding the further development of generative AI and the likelihood this would necessitate the purchase of a large number of Nvidia’s products far into the future; Second, Nvidia posted another strong beat[1]and-raise quarter, where the company upped its F2Q25 revenue guidance above Street estimates, showcasing its dominant position in the buildout of today’s accelerated computing infrastructure.”
