Latest news with #GraceBlackwell
Yahoo
a day ago
- Business
- Yahoo
Prediction: These 4 Explosive AI Megatrends Will Catapult Nvidia to a $5 Trillion Market Cap
Nvidia CEO Jensen Huang spoke about four key AI growth drivers for his company in Nvidia's Q1 earnings call. These AI megatrends -- reasoning AI, AI diffusion, enterprise AI, and industrial AI -- present huge opportunities for Nvidia. 10 stocks we like better than Nvidia › Nvidia (NASDAQ: NVDA) is breathing down Microsoft's neck to become the world's most valuable company. I think it's only a matter of time before the GPU maker takes the No. 1 spot. In Nvidia's latest quarterly update, CEO Jensen Huang spoke about four artificial intelligence (AI) growth drivers that "are really kicking into turbocharge." Huang was onto something, in my opinion. I even predict that the four explosive AI megatrends he mentioned will catapult Nvidia to a $5 trillion market cap. Huang discussed reasoning AI extensively during Nvidia's first-quarter earnings call. Reasoning AI solves problems step by step. It's also a critical technology for taking AI agents to the next level. Huang noted that there has been "a huge breakthrough in the last couple of years" that has resulted in "super agents" that use multiple tools and work in clusters to solve problems. These reasoning AI agents will almost certainly become heavily used by lots of companies over the next few years. However, they require exponentially more computing power than past AI models. That's great news for Nvidia. Huang believes that his company's Grace Blackwell and NVL72 (which connects Grace CPUs to Blackwell GPUs) together make "the ideal engine" for reasoning AI. I think he's right. And I predict the skyrocketing demand for this technology -- and the future newer-generation versions on the way -- will provide a huge tailwind that helps get Nvidia to a $5 trillion market cap. Huang praised the Trump administration for rescinding the AI diffusion rule established during the Biden administration. This rule, which was originally scheduled to go into effect on May 15, 2025, before its rescission, would have restricted U.S. AI chip exports to many countries. AI won't be limited to a handful of technologically advanced nations. Jensen correctly observed in the Q1 earnings call that "countries around the world are awakening to the importance of AI as an infrastructure, not just as a technology of great curiosity and great importance, but infrastructure for their industries and start-ups and society." As countries build AI infrastructure, Huang thinks it will create a tremendous opportunity for Nvidia. Again, I fully agree. Enterprise AI is the integration of AI throughout a large organization to improve its business processes. Huang said in Nvidia's Q1 call, "Enterprise AI is just taking off." This megatrend is joined at the hip with reasoning AI. Many of the AI agents that reasoning AI makes possible will be deployed enterprise-wide. Huang pointed out that enterprise information technology consists of three major components: compute, storage, and networking. These components are also critical for enterprise AI. Nvidia has put all of them together. I expect the company will see strong revenue and earnings growth as a result of its enterprise AI leadership, which will propel its market cap higher. Industrial AI was the last AI megatrend mentioned by Huang. It's the application of AI to industrial processes to improve efficiency and productivity. Huang predicted, "[E]very factory today that makes things will have an AI factory that sits with it." He believes these AI factories will create and operate AI for the physical factory, plus "power the products and the things that are made by the factory." His vision also includes robots in the factories. Nvidia's Omniverse product already helps manufacturers build 3D simulations and "digital twins" of real-world facilities. They can also use Omniverse to train and test autonomous vehicles and robots used in factories. Is Huang right that "every factory will have an AI factory"? Maybe not. However, I suspect that many factories will. And I predict industrial AI will be a significant growth driver for Nvidia over the next decade that helps catapult the company to a $5 trillion market cap. 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 $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% 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 Keith Speights has positions in Microsoft. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Prediction: These 4 Explosive AI Megatrends Will Catapult Nvidia to a $5 Trillion Market Cap was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
3 days ago
- Business
- Globe and Mail
Prediction: This Artificial Intelligence (AI) Company Will Be Worth Over $5 Trillion in 10 Years
Shares of Nvidia (NASDAQ: NVDA) have been impacted by several factors, including increasing macroeconomic uncertainty, geopolitical tensions, ongoing tariff wars, export controls, and rising competition from Chinese companies in the past few months. However, the recent earnings performance -- including its recent impressive result in the fiscal first quarter of 2026 -- demonstrates why investors should not let the short-term noise distract them from the company's long-term growth prospects. Nvidia's first quarter fiscal 2026 earnings performance (ending April 27) validates its position as the clear leader in the artificial intelligence (AI) -powered hardware, software, and infrastructure services market. Revenue soared 69% year-over-year to $44.1 billion, while data center revenue surged 73% year-over-year to $39.1 billion in the first quarter. These tailwinds can propel Nvidia's market value to over $5 trillion in the next decade. Leadership in AI hardware Nvidia's dominance in the AI chip market, where it still controls a more than 80% share, should remain unchallenged at least for the next few years. The company's latest Grace Blackwell 200 (GB200) graphics processing units (GPUs) enable organizations to run computationally heavy reasoning AI models with 25 times higher performance and at a twentieth of the cost of Hopper H100 chips. The Blackwell ramp-up has been the fastest product launch in Nvidia's history and accounted for nearly 70% of data center compute revenues in the recent quarter. Major hyperscalers are already deploying nearly 72,000 Blackwell GPUs weekly across their data centers and are planning to further ramp output in this quarter. Furthermore, Nvidia is sampling GB300 systems at major cloud service providers and expects production shipments to commence by the end of the second quarter. While these systems have the same architecture, physical footprint, and mechanical and electrical specifications as GB200, they offer 50% more high-bandwidth memory capacity and a 50% increase in inference computing performance. Hence, cloud service providers can transition from GB200 to GB300 systems while benefiting from higher performance Software ecosystem Nvidia's software ecosystem has also become a strong moat, ensuring that customers will find it prohibitively costly to switch to competitors' chips. The company's comprehensive CUDA parallel programming platform is currently used by 5.9 million developers to accelerate GPUs for various general-purpose applications effectively. CUDA is currently used to accelerate all AI models and over 4,400 applications. Subsequently, CUDA helps prevent significant infrastructure investments from becoming obsolete in an exceptionally fast-evolving market. Additionally, the company launched its TensorRT software package for inference (real-time deployment of trained AI models) optimization and the TensorRT-LLM software library to ensure the fast and efficient running of large language models. Strategic partnerships Nvidia partnered with Humain, a newly launched AI company owned by Saudi Arabia's Public Investment Fund, to build AI factories with 18,000 of its latest GB300 Blackwell chips in the first deployment phase. Nvidia is also playing a key role in the Stargate Project, through which OpenAI, SoftBank, and Oracle have said they plan to invest $500 billion into U.S.-based AI infrastructure over the next four years. These strategic alliances could be significant growth catalysts for Nvidia in the long run. How can Nvidia reach a $5 trillion valuation by 2035? In its fiscal 2025, which ended Jan. 26, the chipmaker's revenues grew by 114% to $130.5 billion. While analysts are projecting lower revenue growth rates for future years, the consensus expectation is still for the company to grow quickly. Nvidia's revenues are forecast to increase by 52.8% and 23.9% in its fiscal 2026 and fiscal 2027, respectively. And the company's already off to a good start by recording 69% revenue growth in Q1 of fiscal 2026. In that context, it is reasonable to expect Nvidia to grow at a compound annual rate of nearly 20% over the next decade. If it does, it would wind up with about $808 billion in revenues in its fiscal 2035. Nvidia reported an exceptionally high net income margin of 55.8% in its fiscal 2025. The company has been able to steadily expand its margins in the past couple of years, largely due to its dominance in the AI market. Even if we assume that it will have to accept some margin contraction due to increasing competition and scale, it is reasonable to expect it to produce a net income margin of nearly 27.9% -- its 10-year median margin -- in fiscal 2035. With a top line of $808 billion, that would give it a net income of around $225 billion that year. Nvidia is trading at around 32.6 times forward earnings. Analysts have projected 5-year forward P/E multiple of 23.5x for Nvidia. Assuming this valuation multiple for the next 10 years , the company can reach a market value of $5.29 trillion by 2035. Hence, the company is well positioned to cross the $5 trillion market capitalization, even under conservative expectations. There are reasons to suspect its market value could grow even higher, too -- consider Nvidia's upcoming AI initiatives, such as Sovereign AI, agentic AI, and physical AI. Other growth catalysts Nvidia is also benefiting from the increasing demand for high-performance chips in gaming and AI PCs. Gaming revenue rose 42% year-over-year to $3.8 billion in the first quarter, driven by strong adoption of Blackwell architecture systems from gamers, creators, and AI enthusiasts. Enterprise AI is also becoming a significant growth catalyst, with Nvidia bringing AI-powered storage, computing, and networking capabilities directly to corporate environments. The company's RTX Pro, DGX Spark and DGX Station enterprise AI systems are targeting the $500 billion market opportunity. Nvidia's Omniverse and robotics platforms are also powering factory automation and humanoid robotic systems. With all that in mind, long-term investors should consider picking up at least a small stake in Nvidia to profit from the AI wave over the next decade. Should you invest $1,000 in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks 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 $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor 's total average return is979% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
Yahoo
20-05-2025
- Business
- Yahoo
Cadence Rises 27% in a Month: How Should You Play the Stock?
Cadence Design Systems CDNS stock surged 27.3% in the past month, outperforming the Computer-Software industry, the Zacks Computer and Technology sector and the S&P 500 composite's growth of 25.3%, 22.6% and 15.3%, respectively. Image Source: Zacks Investment Research The trigger has been the company's stellar first-quarter results, with the stock gaining 12% since April 28. The stock closed last trading session at $320.30 and is now much closer to its 52-week high of $328.99. So, the question now arises is whether to stay invested or pull out? Can the stock rally further? Let us analyze the stock in detail to ascertain if it is worth investment consideration. Broad-based demand for its solutions amid robust design activity is a key catalyst. Secular trends like 5G, increasing usage of hyperscale computing and autonomous driving are influencing design activity across semiconductor and systems companies. This is likely to open up opportunities for its end-to-end EDA, IP and systems solutions. The focus on Generative AI, Agentic AI and Physical AI is leading to an exponential increase in computing demand and semiconductor innovation. This bodes well for Cadence. To capitalize on this opportunity, it has been collaborating with several tech giants, including Qualcomm and NVIDIA Corporation NVDA, on their next-generation AI designs across both training and inference. The company also expanded its partnership with NVIDIA for the latter's Grace Blackwell architecture to accelerate computing and agentic AI solutions. It is among the first adopters of the NVIDIA Omniverse blueprint for AI-factory digital twins, which will augment data center design and operations. Cadence is eyeing new AI markets like Life Sciences through its OpenEye drug discovery software. The company is also expanding partnerships with its foundry partners like Taiwian Semiconductor Manufacturing, Intel and Arm Holdings. Image Source: Zacks Investment Research Amid rapid AI proliferation, the portfolio has been gaining momentum along with AI-powered products such as Cadence Cerebrus. The product had more than 1000 tapeouts year to date and 50 new logos in the first quarter. Going ahead, the company is likely to benefit from customers increasing their R&D spending in AI-driven automation. On the last earnings call, Cadence highlighted that it has not seen any shifts in customers' behavior presently, as they continue to invest in next-generation designs. Cadence continues to invest heavily in verification and digital design products, which is helping it to launch products that address the ever-growing needs of electronics and semiconductor companies. The company's verification business has been gaining traction due to the rising complexity of system verification and software bring-up. In April 2024, the company unveiled the latest Palladium Z3 Emulation and Protium X3 FPGA Prototyping systems. This is an advanced digital twin platform that is aimed at addressing the growing complexity of system and semiconductor design. The latest systems offer more than double the capacity and a significant performance increase compared with Palladium Z2 and Protium X2 systems. In 2024, hardware solutions added more than 30 customers and almost 200 repeat customers, especially among AI and hyperscale clients. The strategic acquisition plan has played a pivotal part in developing the company's business in the last few years. To strengthen its IP business, the company announced the acquisition of Secure-IC, which will expand its IP portfolio, including interface, memory, AI and DSP solutions. In April 2025, Cadence signed a definitive agreement with Arm Holdings to acquire its Artisan foundation IP business. The acquisition includes a suite of standard cell libraries, memory compilers and general-purpose I/Os, all finely tuned for advanced process nodes at leading global foundries. Driven by strong results, management upgraded its outlook for 2025. Revenues for 2025 are now estimated to be in the range of $5.15-$5.23 billion compared with $5.14-$5.22 billion guided earlier. Non-GAAP EPS for 2025 is expected to be between $6.73 and $6.83 compared with $6.65-$6.75 guided earlier. Weakness prevailing over global macroeconomic conditions and substantial exposure to the semiconductor vertical are concerning. Any reduction in R&D spending for companies within the semiconductor sector could affect CDNS' top-line performance. Higher operating costs and stiff competition in the EDA/AI space from the likes of Keysight Technologies, Synopsys SNPS and ANSYS ANSS are additional headwinds. The pending acquisition of ANSYS by Synopsys is likely to intensify competition in the EDA space for all players. The transaction is expected to close in the first half of 2025. While Cadence is expanding aggressively through M&A, acquisitions may distract from core performance if integration falls short or synergies do not materialize as expected, which could weigh on margins. Cadence stock is trading at a premium, with a forward 12-month Price/Earnings ratio of 45.04X compared with the industry's 32.02X. In comparison, SNPS and ANSS trade at multiples of 32.16 and 28.01, respectively. Image Source: Zacks Investment Research Analysts remain bearish on the stock, as evident from the downward estimate revision in the past 60 days. Image Source: Zacks Investment Research Cadence, with its strong fundamentals, robust AI-driven demand and a resilient recurring revenue model, remains a compelling opportunity. The company's prominent position in the EDA space and strategic partnerships with tech giants like NVIDIA and Qualcomm position it well for long-term growth. While macro uncertainty, integration risks and valuation are valid concerns, the company's upgraded guidance and expanding market footprint support a continued bullish outlook. Given the strong momentum and secular tailwinds, holding the stock remains a prudent strategy for long-term investors. CDNS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Synopsys, Inc. (SNPS) : Free Stock Analysis Report Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report ANSYS, Inc. (ANSS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
The Star
19-05-2025
- Business
- The Star
Nvidia CEO unveils new tech to keep global AI expansion going
Now back in his native Taiwan, Huang introduced updates to the ecosystem around Nvidia's accelerator chips, which are key to developing and running AI software and services. — AP Photo/Chiang Ying-ying Nvidia Corp. unveiled the latest raft of technologies aimed at sustaining the boom in demand for AI computing – and ensuring that its products stay at the centre of the action. Chief Executive Officer Jensen Huang on Monday kicked off Computex in Taiwan, Asia's biggest electronics forum, touting new products and cementing ties with a region vital to the tech supply chain. His company's shares are riding a fresh rally following a dealmaking trip to the Middle East as part of a trade delegation led by President Donald Trump. Now back in his native Taiwan, Huang introduced updates to the ecosystem around Nvidia's accelerator chips, which are key to developing and running AI software and services. The central goal is to broaden the reach of Nvidia products and eliminate barriers to AI adoption by more industries and countries. "When new markets have to be created, they have to be created starting here, at the centre of the computer ecosystem,' Huang said about the island. Huang opened with an update on timing for Nvidia's next-generation GB300 systems for artificial intelligence workloads, which he said are coming in the third quarter of this year. They'll mark an upgrade on the current top-of-the-line Grace Blackwell AI systems, which are now being installed by major cloud service providers. The chipmaker is offering a new version of complete computers that it provides to data centre owners. NVLink Fusion products will allow customers the option to either use their own central processor units with Nvidia's AI chips or use Nvidia's CPUs with another provider's AI accelerators. To date, Nvidia has only offered such systems built with its own components. This opening-up of its designs – which include crucial connectivity components that ensure a high-speed link between processors and accelerators – gives Nvidia's data centre customers more flexibility and allows a measure of competition while still keeping Nvidia technology at the centre. Major customers such as Microsoft Corp. and Inc. are trying to design their own processors and accelerators, and that risks making Nvidia less essential to data centres. MediaTek Inc., Marvell Technology Inc. and Alchip Technologies Ltd. will create custom AI chips that work with Nvidia processor-based gear, Huang said. Qualcomm Inc. and Fujitsu Ltd. plan to make custom processors that will work with Nvidia accelerators in the computers. – Bloomberg
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Business Standard
19-05-2025
- Business
- Business Standard
Nvidia CEO Huang unveils new tech to keep global AI expansion going
Nvidia Corp. unveiled the latest raft of technologies aimed at sustaining the boom in demand for AI computing — and ensuring that its products stay at the center of the action. Chief Executive Officer Jensen Huang on Monday kicked off Computex in Taiwan, Asia's biggest electronics forum, touting new products and cementing ties with a region vital to the tech supply chain. His company's shares are riding a fresh rally following a dealmaking trip to the Middle East as part of a trade delegation led by President Donald Trump. Now back in his native Taiwan, Huang introduced updates to the ecosystem around Nvidia's accelerator chips, which are key to developing and running AI software and services. The central goal is to broaden the reach of Nvidia products and eliminate barriers to AI adoption by more industries and countries. 'When new markets have to be created, they have to be created starting here, at the center of the computer ecosystem,' Huang said about the island. Huang opened with an update on timing for Nvidia's next-generation GB300 systems for artificial intelligence workloads, which he said are coming in the third quarter of this year. They'll mark an upgrade on the current top-of-the-line Grace Blackwell AI systems, which are now being installed by major cloud service providers. The chipmaker is offering a new version of complete computers that it provides to data center owners. NVLink Fusion products will allow customers the option to either use their own central processor units with Nvidia's AI chips or use Nvidia's CPUs with another provider's AI accelerators. To date, Nvidia has only offered such systems built with its own components. This opening-up of its designs — which include crucial connectivity components that ensure a high-speed link between processors and accelerators — gives Nvidia's data center customers more flexibility and allows a measure of competition while still keeping Nvidia technology at the center. Major customers such as Microsoft Corp. and Inc. are trying to design their own processors and accelerators, and that risks making Nvidia less essential to data centers. MediaTek Inc., Marvell Technology Inc. and Alchip Technologies Ltd. will create custom AI chips that work with Nvidia processor-based gear, Huang said. Qualcomm Inc. and Fujitsu Ltd. plan to make custom processors that will work with Nvidia accelerators in the computers.
