This is the beginning of the AI revolution. You did not miss it!
Here's 10 reasons why $NVIDIA Corp(NVDA)$ is going a lot higher.
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I think $NVIDIA Corp(NVDA)$ 's dominance can continue to lead the industry for the next 5-10 years.
While many discussions have surfaced regarding NVIDIA's success in data centers, this analysis aims to delve deeper into nine key aspects of their performance that might have been overlooked.
$NVIDIA Corp(NVDA)$ eps is up 765% a year ago. Everyone missed the important part of the earnings call.
Here's 9 massive points people didn't pay attention to:
Market Growth: $NVIDIA Corp(NVDA)$ software solutions have reached a remarkable $1 billion run rate, with Huang expressing that they're just scratching the surface. $NVIDIA Corp(NVDA)$ AI Enterprise stack, offered at $4,500 per GPU per year, presents a substantial growth opportunity.
Chinese Market Dynamics: Despite anticipated challenges due to U.S. export control regulations, NVIDIA is adapting by introducing alternative solutions not requiring licenses for the Chinese market. This adaptability hints at potential revenue resurgence in quarters to come.
Margin Considerations: While current gross margins are impressive at 76.7%, there's a cautious eye on future quarters as supply constraints may impact margins. Competitive pressures, especially from $Advanced Micro Devices(AMD)$, could further influence this aspect.
Inference Market Expansion: With the imminent release of the h200 chip, boasting double the inference performance of its predecessor, NVIDIA is poised to maintain dominance in this crucial segment, which now constitutes an estimated 40% of overall revenue.
Growth Outlook: Jensen Huang's optimism regarding growth prospects for 2024 and 2025, coupled with strong demand for existing products like Hopper, underscores NVIDIA's potential to sustain growth despite industry challenges.
Inventory Management: $NVIDIA Corp(NVDA)$ 's transparency with cloud server providers and comprehensive ecosystem partnerships help mitigate the risk of inventory overages, ensuring efficient allocation and demand forecasting.
Supply Constraints: While supply improvements are noted, demand continues to outstrip supply, particularly for new products like the h200. This constraint paradoxically bolsters margins and provides a positive outlook for future revenue.
Visualization Segment: Noteworthy growth in the visualization segment, especially in workstations and laptops, presents an emerging opportunity alongside the AI market's evolution.
Automotive Sector Potential: $NVIDIA Corp(NVDA)$ 's data center solutions play a vital role in the automotive sector, with data center revenue from this vertical surpassing $1 billion. The increasing integration of AI in vehicles signals further revenue growth in this segment.
$NVIDIA Corp(NVDA)$ year-end price target based on current earnings results are $1400+
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