2) NVIDIA Corporation (NASDAQ:NVDA)
% Gain on a YTD Basis: ~165%
Number of Hedge Fund Holders: 179
NVIDIA Corporation (NASDAQ:NVDA) offers graphics and compute and networking solutions in the US, Taiwan, China, Hong Kong, and internationally.
NVIDIA Corporation (NASDAQ:NVDA) has been investing for over a decade in software in such a way that allows its hardware to outperform regular silicon. Such outperformance stems from software optimizations and acceleration libraries which are updated constantly. Moving forward, intangible assets associated with its graphics processing units, and switching costs involved around its proprietary software should continue to act as tailwinds.
Market experts opine that, just like iOS, which locks customers into the iPhone since developers are making applications for the iPhone, NVIDIA Corporation (NASDAQ:NVDA) is also working on the same thing. The AI engineers have been learning the CUDA platform to program GPUs. This should assist in locking the people. NVIDIA Corporation (NASDAQ:NVDA) expects further growth, anticipating Q3 2024 revenue to touch $32.5 billion. The company expects continued expansion in its Hopper architecture and Blackwell products.
The company anticipates to ship several billion dollars in revenue from its Blackwell platform in Q4 2024. Also, NVIDIA Corporation (NASDAQ:NVDA) expects robust growth in the data center business next year. The company sees a strong opportunity in sovereign AI, with countries planning their own generative AI systems. Its strategic focus on Gen AI and enterprise AI should help create additional revenue streams.
JPMorgan Chase & Co. increased its price target from $115.00 to $155.00, giving an “Overweight” rating on 29th August. Vltava Fund, an investment management company, recently released its third-quarter 2024 investor letter. Here is what the fund said:
“Over the summer, we devoted a lot of time to studying the AI-related investment wave. This spans a wide range of sectors and our view could be very briefly summarised as follows: The first-tier beneficiaries are primarily companies in the semiconductor sector, NVIDIA Corporation (NASDAQ:NVDA) perhaps the most. That company is benefiting from the huge increase in investment by large technology companies to build enormous data centres. We know who NVIDIA’s customers are. They are companies like Meta, Alphabet, Amazon, and Microsoft. They are investing hundreds of billions of dollars into their AI capabilities. What is not entirely clear, however, is who are and will be the customers of NVIDIA’s customers, and, more importantly, when, and if, they will be able to come up with such huge demand for AI services that the profits from AI will justify and pay for the enormous investments all these companies have been making. The further we move away from the starting point that NVIDIA represents in our more broadly-reaching estimates, the lessreliable those estimates are.So far, we know just one thing for sure, and that is that investments in AI capabilities are ongoing and they are huge. They are not only bringing large demand to chipmakers and the semiconductor sector but to some other sectors as well. Indeed, building AI clusters also requires the construction of new semiconductor factories, new energy sources, and all the associated infrastructure. The numbers under consideration are incredibly high. It is possible that over the next decade the construction of AI centres will necessitate a 20% increase in US energy consumption. The investment required will be measured not in the hundreds of billions of dollars, but in an order of magnitude higher. Maybe two orders of magnitude.”
