Latest news with #customAI
Yahoo
6 hours ago
- Business
- Yahoo
Could This Unstoppable Company Dethrone Nvidia as the Top AI Stock Investment?
Nvidia's GPUs are priced incredibly high. Customers want to design their own products to decrease the cost of purchasing computing power. Broadcom is a key partner in XPU design. 10 stocks we like better than Broadcom › Nvidia (NASDAQ: NVDA) has been the top AI investment since the AI arms race kicked off in 2023. Over that time frame, Nvidia's stock has risen over 800%, turning every $10,000 invested into over $90,000. There aren't many stocks that can claim returns like that, let alone any that have grown to the size of Nvidia. However, some troubles are brewing over at Nvidia that investors must know about. Nvidia has essentially been the sole source of AI computing hardware, allowing it to charge a premium price for its graphics processing units (GPUs). This has caused Nvidia's margins to soar, and its customers are aware of this. The old saying, "Your margins are my opportunity," rings true here, and many of its clients are starting to investigate using custom AI accelerators instead of GPUs. Broadcom (NASDAQ: AVGO) has become a valuable partner in designing these custom AI accelerators, which it calls XPUs. A massive market for this hardware could emerge over the next few years, as companies are now ready to optimize their AI training after the valuable lessons learned since 2023. GPUs, like the ones Nvidia makes, are incredible pieces of hardware. They can process multiple calculations in parallel and perform a wide range of tasks, from AI model training to mining cryptocurrency to engineering simulations to drug discovery. However, if a company is only going to use it to train AI models, Nvidia's cutting-edge GPUs have a decent amount of features that aren't needed. That's where XPUs shine, as they can be designed around running a single type of workload. By optimizing for a workload, XPU clients can tailor their computing hardware to their needs and only pay a slight premium to Broadcom for their design services rather than pay out the nose for some of Nvidia's GPUs. Broadcom's management team is incredibly bullish on this trend. They believe that the total addressable market for XPUs from just three clients will be between $60 billion and $90 billion by 2027. Two additional clients are slated to launch their XPUs by the end of the year, and two more clients have recently selected Broadcom as a partner to design their own XPUs. This is a huge trend that investors can't ignore, but it isn't the end for Nvidia. GPUs still have a place in AI training and other use cases, and many cloud computing providers understand that their clients want access to GPUs because they are flexible. However, XPU usage is expected to grow much faster than GPU usage, which suggests that Broadcom could potentially overtake Nvidia as the top AI hardware player over the next few years. Personally, I own both stocks, as I believe there is still a huge market for GPUs and XPUs. If you made me pick one, I'd point to Broadcom as the outperformer over the next few years. But there may be one thing holding it back. Broadcom's stock is far from cheap, and it actually holds a premium to Nvidia because the market isn't blind to the rise of XPUs. At nearly 36 times forward earnings, Broadcom's stock has a premium price tag. However, if there is a dramatic expansion of XPU usage, like management projects, today's stock price will be a fair price moving forward. Investors must watch Broadcom's results to understand how its XPU business is faring. Still, all indications point toward XPUs being a major success, and investors would be wise to scoop up Broadcom shares before it takes off. Before you buy stock in Broadcom, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Broadcom 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 $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor's total average return is 978% — 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 May 19, 2025 Keithen Drury has positions in Broadcom and Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy. Could This Unstoppable Company Dethrone Nvidia as the Top AI Stock Investment? 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
Forbes
20-05-2025
- Business
- Forbes
Nvidia's AI Ecosystem Masterplan Is Driving Its Stock
Nvidia (NASDAQ:NVDA) shares have increased by nearly 11% in the last week, and is still up almost 40% over the last 30 days. While wider markets have risen after China and the U.S. declared a 90-day halt on tariffs, which is considered a step toward de-escalating the global trade conflict, there have also been a number of company-specific positives for Nvidia as well. Nvidia has introduced NVLink Fusion, a new interconnect technology for chip-to-chip communications that aims to enhance the capabilities of AI systems. Importantly, the company indicates that it will license this technology to other chip designers, allowing them to develop rapid and high-performing custom AI chips. This enables third-party providers to construct semi-custom AI systems that still integrate with Nvidia's ecosystem. This strategy broadens Nvidia's reach within the custom AI hardware sector beyond its own products. Firms like Marvell and MediaTek intend to integrate Fusion into their custom AI system designs. This could be a strategic long-term initiative for Nvidia, as it may encourage companies to commit to its software suite. It could be a move towards Nvidia establishing de facto standards for AI hardware, similar to how Intel influenced the PC sector with its x86 architecture. During President Donald Trump's trip to the Middle East earlier this month, Nvidia CEO Jensen Huang declared that the company would deliver over 18,000 Blackwell AI chips to an AI startup based in Saudi Arabia called Humain, for application in its AI data centers. The so-called 'sovereign AI' sector, which encompasses government-sponsored projects to establish domestic AI capabilities, is gaining significant importance for Nvidia as it seeks to lessen its dependency on American technological giants. Various companies, including Amazon, Meta, Google, and Microsoft, are collectively estimated to make up more than 50% of Nvidia's revenue. Many of these corporations are also working on their own AI chips, making it even more critical for Nvidia to balance its investments. Currently, the rise in NVDA stock over the past four years has been anything but steady, with annual returns being much more erratic than the S&P 500. The stock achieved returns of 125% in 2021, -50% in 2022, 239% in 2023, and 171% in 2024. The Trefis High Quality (HQ) Portfolio, consisting of 30 stocks, displays significantly lower volatility. Furthermore, it has consistently surpassed the S&P 500 in the last four years. What accounts for that? Overall, HQ Portfolio stocks have demonstrated superior returns with reduced risk compared to the benchmark index, providing a smoother ride as reflected in HQ Portfolio performance metrics. Considering the current unpredictable macroeconomic context concerning interest rate reductions and various conflicts, could NVDA find itself facing a similar predicament as in 2022 and underperform the S&P in the coming year, or will it experience a robust upturn? We estimate Nvidia's stock at approximately $101 per share, about 25% lower than the present market value. Explore our evaluation of Nvidia valuation: Is it Overpriced or Underpriced?. Several factors contribute to our current pessimism regarding the stock. We foresee a potential decline in the enthusiasm surrounding AI applications that has driven gains over the past two years, as marginal performance improvements from larger models diminish, alongside challenges in accessing high-quality training data. This transition towards more efficient models could aggravate the effects of a prospective slowdown for GPU manufacturers, including Nvidia. Even though Nvidia stock has been an outstanding performer over recent years, shares can decline rapidly – by 20%, 30%, or even 50% – as has been observed during previous market crashes. No stock is invulnerable. What is the lowest Nvidia stock could fall to in a market collapse? It's beneficial to stay informed.
Forbes
11-05-2025
- Business
- Forbes
Business Tech News: Microsoft Is Pushing The Business Benefits Of AI
Here are five things in business tech news that happened this week in business tech news and how they affect your business. Did you miss them? Microsoft is emphasizing the benefits of custom AI solutions for businesses, highlighting enhanced decision-making, cost efficiency, and accelerated innovation. By integrating AI into platforms like Microsoft Copilot Studio, Azure OpenAI, and Dynamics 365, companies can develop tailored AI agents that automate complex tasks, leading to improved productivity and reduced operational costs. These custom AI tools are designed to be accessible, requiring minimal coding expertise, thus enabling a broader range of businesses to leverage AI capabilities. Microsoft's approach focuses on aligning AI solutions with specific business objectives, ensuring that AI implementations are both effective and sustainable. This strategy supports organizations in achieving faster innovation cycles and maintaining a competitive edge in their respective industries. (Source: ZDNet) Why this is important for your business: It's true but…be careful. AI features (and they're features right now) can be used to make your employees more productive and I strongly suggest getting them trained on all the latest that Microsoft or Google has to offer. But we're still a ways from relying on AI to automate our core processes. My advice is to use this time to clean up your data and get familiar with what AI can (potentially) due for your business so that you're ready to implement when the technology become more reliable. CrowdStrike's 2025 State of SMB Cybersecurity Report reveals a significant gap between cybersecurity awareness and actual protection among small and medium-sized businesses (SMBs). While 93% of SMBs acknowledge cybersecurity risks and 83% have plans in place, only 36% invest in new tools, and a mere 11% have adopted AI-powered defenses. Smaller businesses are particularly vulnerable; among those with fewer than 50 employees, only 47% have a security plan, and over half allocate less than 1% of their annual budget to cybersecurity. Cost concerns heavily influence decisions, with 67% prioritizing affordability over advanced threat protection. Additionally, 50% feel overwhelmed by the plethora of cybersecurity tools available, and nearly 70% rely on third-party guidance for purchasing decisions. Ransomware remains a top threat, especially for businesses with under 25 employees, where 29% reported such incidents in the past year. (Source: Business Wire) Why this is important for your business: Spoiler Alert: CrowdStrike offers tools to help address some of the concerns noted above. But they're not misleading people with these survey results. Cyber threats continue to be a disruptive and expensive part of running a business and these threats are only becoming more pervasive – and powerful – thanks to AI tools. Yes, you should be investing in a suite of cybersecurity products to protect your business. More important you should be getting continuous training because most cyber breaches are caused by employees. Aurora Innovation has launched the first commercial driverless trucking service in the U.S., operating Class 8 autonomous trucks between Dallas and Houston, Texas. These trucks, equipped with the Aurora Driver system, have completed over 1,200 miles without a human driver. The service, in partnership with Uber Freight and Hirschbach Motor Lines, aims to address challenges in the trucking industry, such as driver shortages and high turnover rates. Aurora plans to expand its driverless operations to El Paso and Phoenix by the end of 2025. (Source: Aurora) Why this is important for your business: Autonomous vehicles for private use are still a ways to go, thanks to the complexities of city driving and the potential liabilities facing the companies developing these technologies. But autonomous trucks that can travel hundreds of miles of highways and then be taken over by humans for the last leg? That seems much more acceptable and my prediction is – given the enormous cost savings that can be achieved – the trucking industry will be the first to be disrupted by autonomous vehicles. Epicor has introduced new AI capabilities—Epicor Prism and Epicor Grow AI—aimed at enhancing productivity in supply chain industries. Unveiled at the Epicor Insights 2025 conference, these tools encompass over 200 use cases across functions like finance, production, and customer service. Epicor Prism offers a natural language interface, enabling employees to interact with ERP data efficiently. It facilitates quick information retrieval, decision-making, and automation of tasks, reportedly saving users significant time per query. For instance, the Knowledge Agent within Prism can reduce support time by up to 55 minutes per question. Epicor Grow AI provides predictive analytics by integrating data from various sources, including ERP and third-party systems. It assists in forecasting demand, optimizing inventory, and recommending related products during order entry, thereby improving sales and customer experience. (Source: Business Wire) Why this is important for your business: Epicor is very popular manufacturing and distribution ERP software that's used by both big and mid-sized enterprises. I attended this conference (and will write about it separately) and found their AI offerings to be exciting and consistent with what other good software companies are doing. Whether you're using Epicor or not, my advice is to find out what your software vendor is doing with AI and how it impact your business so that you can determine its ROI. Attending a conference like this is worthwhile (Disclaimer: Epicor is a client of my company. I have not been compensated to write this. This news information is publicly available) Talkdesk has launched the Utilities Experience Cloud, an AI-driven platform designed to enhance customer service for utility providers. This solution integrates contact centers with operational systems, enabling both self-service and live agent support across channels like voice, chat, and SMS. Leveraging agentic AI, it assists customers with issues such as outages, billing, and account management. The platform offers real-time integration with systems like CIS, OMS, and GIS, and includes pre-engineered workflows tailored to common utility inquiries. Virtual agents can be deployed with a single prompt, providing personalized interactions based on customer data. An intelligent outbound messaging feature allows proactive communication during events like storms or routine billing cycles. The no-code approach facilitates rapid implementation, reducing IT resource demands. Overall, the platform aims to streamline operations, improve customer satisfaction, and modernize the utility customer experience. (Source: ITBrief) Why this is important for your business: Talkdesk continues to introduce new products and services aimed at industry groups like utility providers. The features this product includes are important for those in that industry, yet have broader appeal to other industry groups as well. (Disclaimer: Talkdesk is a client of my company. I have not been compensated to write this. This news information is publicly available). Each week I round up five business tech news stories that impact your business (and mine) and explain why.
