Updated at 8:11 am EST
NVIDIANVDAShares rose on Tuesday, putting the group within striking distance of a new all-time high, as investors continue to bet on its leadership in ai following the launch of a new series of chips designed to tighten its grip on the trillion-dollar market. .
Nvidia said its new H200 chip will be faster and offer more memory to power both generative ai and large language models than its H100 predecessor. The new chips, expected to ship in early 2024, will also make it easier for customers to run ai applications on Google Cloud using Nvidia-made chips with deeper integration between hardware and software offerings.
Nvidia unveiled a partnership with GoogleGOOGLEin late August that is looking to leverage its cloud offering to customers, using Nvidia chips and its DGX supercomputing platform, to essentially create a new market for ai as a service for thousands of businesses around the world.
“To create intelligence with generative ai and HPC applications, large amounts of data must be processed efficiently at high speed using large, fast GPU memory,” said Ian Buck, vice president of hyperscale and HPC at Nvidia in a statement following the launch of the H200. . Monday. “With NVIDIA H200, the industry’s leading end-to-end ai supercomputing platform is now faster to solve some of the world’s biggest challenges.”
The launch of the H200 could help support Wall Street’s optimistic revenue projections for Nvidia, as investors continue to bet that ai-related technologies will be the technology sector’s main growth driver in the coming years.
Nvidia, which generated about $27 billion in revenue during its last fiscal year, which ended in January, is expected to more than double, to $55 billion, this year and rise another 50%, to 83 billion dollars, in 2025.
“We view ai as the most transformative technology trend since the Internet’s inception in 1995 and believe many on the street are underestimating the trillion dollars of ai spending that will occur over the next decade in a bonanza for the chip and technology sectors. software that look to the future, with Nvidia and Microsoft MSFT leading the way,” said Dan Ives, an analyst at Wedbush.
Nvidia, which will report its third-quarter earnings next week, had previously forecast revenue of around $16 billion, a figure firmly ahead of the Wall Street consensus that would represent year-over-year growth of around 170%.
The revenue gains are also accompanied by impressive profitability, with expected third-quarter gross margins of around 72.5%, with a margin of error of 2%, a level that would translate into earnings of around $3 per action.
Goldman Sachs, which added Nvidia to its closely watched ‘conviction buy’ list last month, maintains that the chipmaker “will maintain its charter as the fast-paced computing industry standard for the foreseeable future, given its competitive advantage.” and the urgency with which customers are developing and deploying increasingly complex ai models.”
The group is also expanding its reach into the PC market, where rival IntelINTCoccupies the leading position, with reports suggesting it will use technology from Arm Holdings to design CPUs that will run MicrosoftMSFTOS.
Nvidia was one of Arm’s biggest financial backers ahead of September’s IPO and attempted to buy the group before being thwarted by UK regulators last year.
However, a near-term risk to Nvidia’s forecasts is the impact of US export restrictions on exports of ai-related technologies to China.
Media reports suggest that Nvidia is set to introduce a new series of ai chips, designed for customers in China, that will comply with new export rules imposed by the US government.
However, Nvidia noted in a filing with the Securities and Exchange Commission in October that “given global demand for our products, we do not expect a significant near-term impact on our financial results” as a result of the new US restrictions.
Nvidia shares, which have risen for the past nine sessions, the longest winning streak since 2016, rose 0.66% in premarket trading to indicate an opening price of $489.40 each, a level that would value Santa Clara, California. tech giant headquartered at just over $1.2 trillion.
The stock reached an intraday high of $502.66 each on August 24 and an all-time closing high of $493.35 each on August 31.
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