Status Of Nvidia's China Re-Entry Is Unclear After Supplier's Announcement Is Retracted
Nvidia reportedly plans to re-enter the China AI chip market with a processor called the B40, a supplier said Thursday.
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Yahoo
an hour ago
- Yahoo
Nvidia's Stock and Business: How Did I Do With My 5-Year Predictions Made in 2020?
Co-founder and CEO Jensen Huang is still leading the company, as I predicted in 2020. Nvidia's GPUs are still the gold standard for artificial intelligence (AI) training, as I predicted in 2020. Nvidia stock has "solidly outperformed the market" -- an understatement --- as I predicted in 2020. 10 stocks we like better than Nvidia › In March 2020, I outlined where I thought tech giant Nvidia's business and stock would be in five years, or in March 2025. It's now a little past the five-year mark, so how did I do? Overall, I'd give myself a B or a B+. I was mostly correct in my business predictions and accurate about what investors care about the most, the stock price: "I feel very comfortable predicting that Nvidia stock will solidly outperform the market over the next half decade," I wrote. Indeed, from March 1, 2020 (when my five-year predictions article published) through March 1, 2025, Nvidia stock's total return was 1,760% -- nearly 15 times the S&P 500's return of 118%. In other words, Nvidia stock turned a $1,000 investment into a whopping $18,600 over this five-year period. (Nvidia stock's five-year return through the date of this writing, June 4, is a little lower, as the chart below shows. Shares are up since March 1; it's the change in the 2020 start date that slightly lowers their current five-year return.) Nvidia stock's fantastic performance has largely been driven by the incredible demand for the company's graphics processing units (GPUs) and related technology that enable artificial intelligence (AI) capabilities. Status: Correct. In March 2020, I wrote that "as long as [Huang] stays healthy, the odds seem in favor of his still being at Nvidia's helm in five years." For context, Jensen Huang, who co-founded the company in 1993, turned 62 in February, according to public records. Nvidia investors should certainly hope that Huang remains the company's leader for some time. As I wrote in June 2024: Nvidia is many years ahead of the competition in AI-enabling technology thanks to Huang's foresight. Starting more than a decade ago, he began to steadily use profits from Nvidia's once-core computer gaming business to position the company to be in the catbird seat when the "AI Age" truly arrived. Status: Correct. Here's part of what I wrote in the March 2020 article: Nvidia dominates the market for discrete graphics processing units (GPUs) -- the key component in graphics cards for desktop computer gaming. In the fourth quarter of 2019, the company controlled 68.9% of this market. Nvidia has increased its leadership position over the last five years. In the fourth quarter of 2024, it had an 82% share of the desktop discrete GPU market, compared with longtime rival Advanced Micro Devices' 17% share, according to Jon Peddie Research. Intel, which entered this market in 2022, had a 1% share. Growth in Nvidia's gaming market platform will be covered below. Status: Correct. In March 2020, I wrote: "In 2025, the gaming market should be much bigger [relative to 2020]." By all counts -- the number of global gamers, total computer gaming market revenue, and computer gaming PC revenue -- the computer gaming market has grown solidly over the last five years. And Nvidia has benefited nicely from this growth. In fiscal year 2020 (ended late January 2020), the company's gaming market platform generated revenue of $5.52 billion. In fiscal 2025 (ended in late January), this platform's revenue was $11.35 billion. This increase amounts to a compound annual growth rate (CAGR) of 15.5%. This is strong growth for such a huge market. It might not seem so only because Nvidia's data center market platform's growth has been phenomenal over this same period. In fiscal 2020, gaming was Nvidia's largest platform, accounting for 51% of its total revenue. In fiscal 2025, gaming was its second-largest platform behind data center, contributing about 9% of its total revenue. Status: Correct. In March 2020, I wrote: The company's GPU-based approach to accelerating computing is considered the gold standard for DL [deep learning, the dominant type of AI] training, the first step in the two-step DL process. [The second step is inferencing.] This statement is extremely likely to hold true in 2025, in my opinion. Since 2020, both AMD and Intel have launched GPUs for AI-powered data centers, but Nvidia's grip on this market -- which is growing like wildfire -- remains tight. IoT Analytics, a technology market research firm, estimates Nvidia had a 92% share of the data center GPU market in 2024. As an added plus, since 2020, Nvidia's GPUs have gone from having very little share of the AI inferencing chip market to having the largest chunk of this market. Inferencing is the running of an AI application. In fiscal 2020, Nvidia's data center platform's revenue was $2.98 billion. It skyrocketed to $115.2 billion in fiscal 2025, equating to about a 107% compound annual growth rate (CAGR). This amazing growth powered the data center to account for 88% of Nvidia's total revenue in fiscal 2025, up from 27% in fiscal 2020. Status: My timeline was too optimistic. In March 2020, I wrote: "In 2025, fully autonomous vehicles should be legal -- or very close to being so -- across the United States. Nvidia is well positioned to majorly profit from [this event]." I wouldn't say that fully autonomous vehicles are "very close" to being legal across the U.S. This event seems at least a few years away. But I continue to believe this watershed event will "turbocharge" Nvidia's growth thanks to its widely adopted AI-powered DRIVE platform. Status: Correct. In March 2020, I wrote: "Nvidia is incredibly innovative, so there seems a great chance that the company will introduce at least one major new technology that takes nearly everyone by surprise." Over the last five years, Nvidia has launched a good number of major new technologies that have likely taken most investors and Wall Street analysts by surprise. One example is its Omniverse platform, which launched in 2021. This is a simulation platform that enables the creation of virtual worlds and digital twins. It's been widely adopted by a broad industry range of large enterprise companies -- including Amazon, PepsiCo, and BMW Group -- for uses such as designing products and optimizing facility workflow. Status: Correct. Here's what I wrote in March 2020: It's impossible to predict a company's stock price in five years because so many unknowns ... can have a huge influence on the market in general. That said, given the projections made in this article, I feel very comfortable predicting that Nvidia stock will solidly outperform the market over the next half decade. Stay tuned. I'm planning on a predictions article similar to my 2020 one. Hint: It's going to be optimistic, as Nvidia's highly profitable strong revenue growth is far from over, in my opinion. Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $869,841!* Now, it's worth noting Stock Advisor's total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Beth McKenna has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Intel, and Nvidia. The Motley Fool recommends Bayerische Motoren Werke Aktiengesellschaft and recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy. Nvidia's Stock and Business: How Did I Do With My 5-Year Predictions Made in 2020? was originally published by The Motley Fool
Business Insider
2 hours ago
- Business Insider
Nvidia Stock Won't Make Millionaires From Here, Unless AI Demand Goes Parabolic
Nvidia (NVDA) stock is up 45% since April, now hovering around $140. That sounds like a win. But for retail investors hoping this will mint the next generation of millionaires, there's a catch: most of the good news is already priced in. Wall Street still loves Nvidia, but the higher it goes, the harder it becomes to justify buying more—unless something explosive happens in AI demand. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Broadcom Earnings Prove the AI Pie Is Real — and Growing Broadcom (AVGO) just reported Q2 results, beating expectations and raising guidance. The key number? A projected 60% growth in AI revenue this Fiscal year. That's massive. And even though AVGO dipped slightly after earnings, the broader message was bullish for the whole chip sector: AI demand isn't slowing. This supports Nvidia's entire bull case. Nvidia sells the chips that train and deploy AI models. If cloud giants like Amazon (AMZN), Microsoft (MSFT), and Alphabet (GOOGL) are still pouring billions into AI infrastructure, Nvidia will remain the backbone of that effort. Why AI Growth Needs to Go Exponential to Justify Nvidia's Price Here's the hard truth: even a great company can become a bad investment at the wrong price. Nvidia's market cap now reflects a future where AI continues to expand indefinitely. That means AI must expand into new industries like healthcare, robotics, and manufacturing. Edge computing needs to explode. AI hardware refresh cycles need to shorten. Governments and enterprises need to ramp up AI R&D. If these things don't accelerate at scale, Nvidia risks running ahead of its fundamentals. That's why the stock may not create millionaires from here—unless we get another generational leap in spending. Valuation Is Now the Enemy of Asymmetry Back in 2022 and even 2023, Nvidia was still misunderstood. You could buy shares and realistically expect a 2x or 3x return. Today? That asymmetry is gone. With a forward P/E near 50 and trillions in market cap, the company needs to beat high expectations every quarter just to tread water. This makes it hard for small investors to win big. You're not catching a rocket ship at liftoff. You're hopping on after it's halfway to orbit. Sure, it might keep climbing. But the risk/reward has fundamentally changed. A Macro Setup That's Starting to Tighten Nvidia's growth narrative also faces macro threats. U.S.-China chip tensions limit sales of high-end GPUs abroad. A strong dollar may weigh on foreign demand. Rates remain high, tightening funding for startups and AI moonshots. And then there's the bond market. If Treasury yields spike again, tech multiples could compress. Nvidia is particularly sensitive to these macro ripples, which could pull the stock down even if earnings stay solid. Great Businesses Don't Guarantee Great Returns Investors need to ask: Is Nvidia the next Apple or the next Cisco? Apple rode the smartphone wave for over a decade, compounding steadily. Cisco, during the dot-com boom, also led a tech revolution. But anyone who bought Cisco at the peak in 2000 had to wait nearly 20 years to break even. The question isn't just 'how good is Nvidia?' It's 'how much of that greatness is already priced in?' Nvidia Is a Winner, But That Doesn't Make You One Nvidia's fundamentals are strong. Its technology is best-in-class. And AI isn't a fad. But the dream of getting rich from here may be just that—a dream. Unless AI spending enters a new phase of hyper-acceleration, Nvidia may deliver solid, steady gains—not life-changing ones. And that's a distinction every long-term investor needs to understand before chasing another breakout. Is Nvidia a Buy, Sell, or Hold? TipRanks shows a Strong Buy consensus on NVDA, based on 35 Buys, four Holds, and one Sell rating. The average NVDA target price is $172.36. That implies a 23% upside, but in this kind of rally, forward gains don't come easy. You need acceleration—not just growth, but growth of the growth.
Business Insider
3 hours ago
- Business Insider
Nvidia (NVDA) Rival Huawei Is Struggling to Win Over Customers despite Export Rules
Nvidia (NVDA) CEO Jensen Huang has repeatedly warned about the growing competition from China's Huawei in the AI chip market. But so far, Huawei is struggling to convince China's biggest tech companies to adopt its chips, according to The Information. Indeed, although ByteDance, Alibaba (BABA), and Tencent (TCEHY) are testing Huawei's chips, they haven't placed any large orders yet. This is because the firms still prefer Nvidia's products, despite U.S. export restrictions. While Huawei has sold chips to state-owned companies and local governments, it has yet to make major gains with top private tech firms. Confident Investing Starts Here: One major reason why big Chinese tech firms are hesitant to make the switch is that their data centers and engineering teams are built around Nvidia's CUDA software. Moving to Huawei's ecosystem would require rewriting code, retraining staff, and losing access to tools that have been developed over the past 15 years. Testing has also revealed some problems: Huawei's latest AI chip, the Ascend 910C, often overheats, and its Compute Architecture for Neural Networks software lacks many of CUDA's features. Additionally, Chinese tech firms compete with Huawei in cloud computing, which makes them more cautious about adopting a rival's hardware. It also doesn't help that U.S. warnings about penalties for using Huawei's advanced AI chips have added further risk. In fact, after one such warning, a Chinese data center canceled a planned order of Huawei chips. Nevertheless, Huang continues to monitor Huawei's progress closely. What Is a Good Price for NVDA? Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 35 Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average NVDA price target of $172.36 per share implies 21% upside potential.
