Analysts and investors have high hopes for Nvidiaâs big quarterly update on Wednesday: theyâre predicting $24 billion in revenue, over three times more than a year ago. And theyâll be keenly focused on how well the companyâs data center segment is doing, including its graphics processing units (GPUs) â which make powerful chips for AI tasks. The wide-reaching segment makes up about three-quarters of Nvidiaâs revenue. This release could validate Nvidiaâs nifty $2.2 trillion valuation or tone down the fervor surrounding AI stocks. Nvidiaâs shares have soared to $950, from $114, in less than two years, thanks in a big way to skyrocketing demand for AI and its data centers. Itâs been the ultimate âpick-and-shovelâ play in this tech revolution, with the huge competitive advantage itâs got around its (GPUs). And with cloud service behemoths like Amazon, Microsoft, and Google looking to spend even more than expected on AI, Nvidia likely wonât be dropping down to a lower gear anytime soon. Mind you, thatâs not to say itâll all be smooth sailing. Nvidia faces growing competition from Intel, AMD, and Arm. Plus, its heavy reliance on the AI chip market could backfire if the industry sees a hiccup along the way. And because investor expectations are already sky high, even a hint of bad news could have a disproportionate impact on the stock price. That alone has some investors wondering whether Nvidiaâs biggest gains are behind it and whether it might be time to diversify into this trendâs other stocks. Companies like Meta, Intuit, Arm, Micron, CrowdStrike, Equinix, or even AI-powering utilities like Duke Energy are gaining attention as the potential next big play. |
